What is the zone tax offset
The zone tax offset is a tax offset for people who are residents of either:
- specified remote areas
- isolated areas of Australia.
This doesn't include an offshore oil or gas rig.
The offset helps with the higher cost of living, isolation and other factors that come with living in these areas. We call these areas Zone A or Zone B as specified in the Australian zone list, and there are also special areas within each zone. Note that this list is not exhaustive and there is a continuous need to review and revise it. Some new localities may meet the requirements to be in a special area but are not yet included in the Australian zone list.
The Zone A and Zone B geographical boundaries are defined in Australian tax law. Images of these boundaries can be found on the internet.
Eligibility for the zone tax offset
We base your eligibility on your usual place of residence. You’re not eligible if you work in a qualifying remote or isolated area but don't live there. For example, if you're a fly-in-fly-out worker.
To claim the zone tax offset your usual place of residence needs to be both:
- a remote or isolated area (check the Australian zone list noting it's not exhaustive)
- your residence for 183 days or more during the income year in which you are claiming.
If your usual place of residence was in a zone for less than 183 days in the income year, you may still be able to claim the zone offset if:
- your usual place of residence was in a zone for a continuous period of less than 5 years, and
- you were unable to claim in the first year because it was not your residence for 183 days or more
- the total of the days you lived there in the first year and the current income year is 183 days or more
- the period you lived in a zone in the current income year includes the first day of the income year.
Examples of your usual place of residence
Example: no residence in a prescribed zone
Levi is an engineer who lives in Adelaide. He flies to Alice Springs for 12-day shifts at an engineering firm. He then travels back to Adelaide for his days off (which vary between 4 and 8 days in a row).
Levi’s usual place of residence (Adelaide) is not within a prescribed zone, even though he is in Alice Springs for 183 days or more. This means he is unable to claim the zone tax offset.
End of example
Example: residence in a remote area
Jonte is an engineer who lives in Darwin (located in Zone A). He travels to Kununurra in Western Australia (located in a Zone A special area) for his job in the mining industry.
In his usual shift, Jonte drives to Kununurra, works 14 days at the mine and drives back to Darwin, where he remains for 16 days.
Jonte is eligible for the Zone A tax offset because his usual place of residence is in Darwin (Zone A).
End of example
Example: main residence outside Australia
Angela is a doctor who works in the Darwin Hospital emergency department. She flies into Darwin from Auckland, New Zealand, and works on a regular rotational basis in Darwin Hospital.
Usually, Angela works for 10 days and then has a break of between 8 and 10 days. During her breaks, Angela travels back to Auckland to see her friends and family. She stays in accommodation provided by the hospital when she is in Darwin.
Angela is purchasing a house in Auckland. She also has a car which she leaves at her Auckland home for use when she is there. Angela has bills sent to her Auckland home and she is registered to vote in New Zealand.
Angela isn't eligible for the zone tax offset. This is because her usual place of residence is in Auckland.
End of exampleClaiming a zone tax offset
For 2024–25 and future income years, check your eligibility and claim the offset in your tax return when you lodge.
Helping others in your community
You can help others in your community to consider their eligibility for the zone tax offset.
The easiest way to work out eligibility and the amount is to use our Zone or overseas forces tax offset calculatorThis link opens in a new window.
To receive the zone tax offset, you must:
- receive assessable income that you pay tax on
- lodge a tax return.
If you have outstanding tax returns, you need to lodge them to claim the zone tax offset.
Tax agents and claiming a zone tax offset
You don’t need to use a tax agent to claim the zone tax offset. You can use our Zone or overseas forces tax offset calculatorThis link opens in a new window to help you work out how much you can claim if you're eligible.
Amount of a zone tax offset
The minimum (base) amount of zone tax offset will depend on your usual place of residence and the zone you live in.
Other things that may change how much you get include:
- how many children under 21 years old or full-time students under 25 years old you look after
- if you're a single parent
- if you receive an invalid or invalid carer tax offset
- if you receive a remote area allowance.
The easiest way to work out your eligibility and how much your offset should be is to use our Zone or overseas forces tax offset calculatorThis link opens in a new window.
|
Zones |
Base amount |
|---|---|
|
Special area A or B |
$1,173 |
|
Zone A |
$338 |
|
Zone B |
$57 |
Effect of a zone tax offset on Centrelink payments
The zone tax offset is not assessable income for Centrelink purposes.
Centrelink remote area allowance and a zone tax offset
The zone tax offset amount you can claim is reduced by any amount paid to you as a remote area allowance from Centrelink.
Calculate and claim the zone tax offset
You need to calculate the tax offset and claim the amount in your tax return at Zone or overseas forces.
You can only claim one of these tax offsets. If you qualify for both, you can claim the one that gives you the greater offset amount.
Use the calculator to work out your eligibility for a tax offset and the amount to claim.
Zone or overseas forces tax offset calculator