Under the Pacific Australia Labour Mobility (PALM) scheme, workers from Pacific Island countries and Timor-Leste can work in Australia for seasonal (short-term) placements of up to 9 months, or longer-term placements of between one and 4 years.
How you're taxed in Australia depends on your residency for tax purposes.
The PALM scheme is managed by the Department of Foreign Affairs and Trade (DFAT). For more information visit the PALM scheme websiteExternal Link.
For tax purposes in Australia, individuals will be either:
- an Australian resident
- a foreign resident.
Whether you're a resident for tax purposes will depend on your individual circumstances.
- Seasonal (short-term) PALM scheme participants are likely to be foreign residents for tax purposes.
- Longer-term PALM scheme participants are likely to be Australian residents for tax purposes.
You, or your employer, can check your visa status using the Visa Entitlement Verification Online systemExternal Link.
If you have a subclass 403 visa to work in Australia under the PALM scheme, your employer will withhold tax from your pay.
The amount they withhold depends on your residency for tax purposes and how much you earn.
Foreign resident workers
Your employer will withhold tax at a flat rate of 15% on all payments made to you if all of the following apply:
- you are a foreign resident for tax purposes
- you work under the PALM scheme
- your employer is an approved employer.
This tax is paid to us by your employer and you are not required to lodge a tax return if you don’t earn income from any other sources in Australia.
Income you earn under the PALM scheme is considered to be non-assessable, non-exempt income and you can't claim any deductions against this income.
If your employer is not approved to hire under the PALM scheme, they will withhold tax at foreign resident rates and you will need to lodge a tax return.
Example: foreign resident worker in the PALM scheme
Langi comes to Australia for 8 months on a 403 visa. The visa is issued after 4 April 2022 under the PALM scheme to pick citrus as a seasonal worker in rural and regional locations. Langi is a foreign resident for tax purposes.
Langi works at an orange farm in Griffith, New South Wales for an employer who is approved under the PALM schemeExternal Link. She is paid $26 per hour and guaranteed 10 hours for 6 days each week.
As Langi is working for an approved employer under the PALM scheme, her employer will withhold 15% tax from her salary and wages. Her weekly salary is calculated as:
- $26 per hour × 10 hours × 6 days = $1,560 per week
Her employer withholds 15% tax: ($1,560 × 15%) = $234
Langi’s take home pay each week is $1,326.
Because Langi is a foreign resident working under a 403 visa in the PALM scheme, she is working for an approved employer under the PALM scheme, and she does not earn income from other sources in Australia, Langi is not required to lodge a tax return in Australia.End of example
Australian resident workers
If you're an Australian resident for tax purposes, you will pay tax at the rate set out in the individual income tax rates. Your employer is required to withhold tax when they pay you. You are required to lodge a tax return.
Example: Australian resident worker in the PALM scheme
Aberto comes to Australia for 4 years on a 403 visa under the long-term PALM scheme to work in rural and regional locations. Aberto is an Australian resident for tax purposes. Aberto has a Medicare Entitlement Statement from Services Australia to show he is not eligible for Medicare in Australia.
Aberto works at a vineyard in the Coonawarra region in South Australia, earning $37,000 per annum.
As Aberto is an Australian tax resident, his employer will withhold tax from his salary and wages based on the resident tax rates.
At the end of the income year, Aberto must lodge an income tax return. Assuming Aberto has no other income and no deductions, his tax liability for the income year is calculated as:
- ($37,000 salary − $18,200 tax free threshold) × 19% tax rate = $3,572
- Less a credit for the low income tax offset (LITO), being $700.
The amount of tax Aberto will pay for the income year is $3,572 − $700 = $2,872. Alberto's income after tax is $34,128.End of example
Before you start work in Australia, you should:
- apply for a tax file number
- complete a TFN declaration for your employer
- know your workplace rights.
If you plan to work in Australia, you need a tax file number (TFN). Your TFN is your personal reference number in our tax system.
You can apply for a TFN online once you have your work visa.
You don't have to have a TFN, but without one you pay more tax.
When you start work, you give your employer a Tax file number declaration. This helps the employer work out how much tax to withhold from your pay.
Your employer has to also pay super for you if you are an eligible employee. They may also be required to pay fringe benefits tax if they provide you with any benefits in addition to your pay.
Everyone working in Australia has the same workplace rights under the National Employment StandardsExternal Link (NES).
The national minimum wage and NES make up the minimum employment entitlements that must be provided to all employees.
The Fair Work Ombudsman provides information on workplace rights and entitlements for visa holders and migrant workersExternal Link.
At the end of the income year or when you finish working in Australia, consider if you need to:
- access your income statement
- lodge a tax return
- apply for a departing Australia superannuation payment (DASP)
Your employer will usually provide you with an income statement. It will show the amount you earned, tax withheld and super that has been paid. You will be able to access and see your year-to-date tax and super information (income statement) in ATO online services through your myGov account from within Australia. If not, you can contact us.
The Australian income year starts on 1 July and ends on 30 June the following year.
You don't need to lodge a tax return or a non-lodgment advice if you are a foreign resident for tax purposes and all of your income was earned from your employment in the PALM scheme.
You will need to lodge a tax return if you are either:
- a foreign resident for tax purposes and you earn income from sources in Australia in addition to the PALM scheme
- an Australian tax resident.
If you leave Australia permanently before 30 June, you can lodge your tax return early.
When you leave Australia and return to your home country, you can apply to have your super paid to you as a departing Australia superannuation payment (DASP).
You can apply after you leave Australia if you meet all DASP requirements.
If you are a foreign resident PALM worker with no other income and your employer took out more than 15% of your income for taxes, you might be eligible to receive back the extra money.
You will need to send us a letter asking for a refund and provide documents to prove your claim.
Your letter must include the following information:
- your TFN
- your full name
- date of birth
- your postal address
- your country of residence
- daytime phone number or mobile number
- your gross PALM income for the year (the amount you were paid before tax was withheld)
- total amount of tax withheld
- your signature.
You should also include the following, if available:
- evidence that you were a foreign resident PALM worker – for example, copy of visa stamp
- a letter from your employer, confirming details of the withholding
- a copy of your payslips.
You need to send your request, including all supporting documents, by post to:
Australian Taxation Office
PO Box 1032
ALBURY NSW 2640