Part 1 – Australian Resident

Last updated 31 May 2020

Use this part if you were an Australian resident for tax purposes during 2019–20.

What you need

You will need details of your JPDA income and any foreign tax paid from your income statement, PAYG payment summary – foreign employment for 2019–20, or letter from your employer.

You need to know

You are taxed on your net assessable JPDA income at resident rates of tax with a foreign income tax offset allowed for the lesser of the:

Australian tax payable on your net assessable JPDA income
Timor-Leste tax paid on your JPDA employment income.

What you need to do

Use worksheets 1 and 2 to complete the following sections in myTax:

Foreign employment income (on an income statement/payment summary)
- Net foreign employment income
- Foreign tax paid
Foreign income tax offset, in 'Offsets' section.

Follow these steps to complete myTax.

If you have an income statement, payment summary or letter from your employer that includes JPDA income, complete worksheet 1. This shows you how to work out your net foreign employment income.
If you have an income statement or payment summary that includes foreign tax paid, show it in myTax and complete worksheet 2. This shows you how to work out your foreign income tax offset for your net foreign employment income.
Complete the remainder of your tax return.

Example 1 will help you fill in worksheets 1 and 2.

Example 1

Jose, an employee driller, lived in Darwin (zone A) when he was not at a drilling site. For eight months of the income year he worked in the JPDA. Jose' income statement from non-JPDA employment showed $74,000 gross salary and Australian PAYG tax withheld of $26,260. A separate income statement from his JPDA employment showed gross salary and wages of $96,000 relating to his period in the JPDA and that, in addition to the $12,152 Australian tax withheld, $17,280 tax had been withheld and paid to Timor-Leste. The amount paid to Timor-Leste was shown on the income statement at the 'foreign tax paid' label.

Jose had work-related expenses of $700 of which $500 related to his work while in the JPDA. He had no other income or deductions. Jose's taxable income is therefore $169,300. Jose had no dependants. He had appropriate hospital cover for the whole year and was not liable to pay Medicare levy surcharge. He is entitled to a zone offset of $338 as he lived in Darwin for more than 183 days.

Worksheet 1 – Jose
Row	Calculation elements	Amount
a	Gross JPDA income included on your income statement or PAYG payment summary – foreign employment. This includes amounts shown at Foreign employment income (on an income statement/payment summary) in myTax: Gross payments Lump sum A, and Lump sum E.	$96,000
b	Total work-related expenses directly related to JPDA income This includes amounts shown at the appropriate sections in myTax: Union or professional association fees – in Foreign employment income (on an income statement/payment summary) Work-related car expenses Work-related travel expenses Work-related clothing, laundry and dry-cleaning expenses Work-related self-education expenses Other work-related expenses.	$500
c	Take row b away from row a. Jose enters the amount at c at 'Net foreign employment income' at Foreign employment income (on an income statement/payment summary) in myTax.	$95,500

Worksheet 2 – Jose
Row	Calculation elements	Amount
a	Taxable income as shown in myTax	$169,300
b	Tax¹ on taxable income using our rates and calculators	$53,524
c	Total net foreign employment income (the amount at row c in worksheet 1).	$95,500
d	Take row c away from row a.	$73,800
e	Tax¹ on row d.	$17,008
f	Take row e away from row b.	$36,516
g	Total foreign tax paid as shown on all income statements and PAYG payment summary – foreign employment	$17,280

Note 1: This includes any Medicare levy and Medicare levy surcharge payable.

Jose's foreign income tax offset is the lesser of row f and row g. Jose's foreign income tax offset is $17,280.

If Jose's foreign income tax offset did not exceed $1,000, myTax would automatically complete the Foreign income tax offset. However because it does exceed $1,000 Jose includes his foreign income tax offset at Foreign income tax offset, in the 'Offsets' section. On Prepare return screen, alongside 'Offsets' section he clicks 'Add/Edit'. Under the 'Foreign income tax offsets' heading he enters the offset amount (g).

Jose will receive a refund of $2,506.

This is:

$53,524 (tax and Medicare levy payable)
minus $338 (zone tax offset)
minus $17,280 (foreign income tax offset)
minus $38,412 ($26,260 + $12,152 Australian tax withheld).

If Jose had worked in Australia for the full year and had the same income and deductions, he would have completed the tax return differently and had a different PAYG Australian tax withheld amount, but his refund would have been the same.

Calculations are based on monthly payments.

End of example

Worksheet 1: Net foreign employment income

If you have more than one income statement or PAYG payment summary – foreign employment showing JPDA income, you will need to work out a net foreign employment income amount for each income statement or payment summary.

Worksheet 1
Row	Calculation elements	Amount
a	Gross JPDA income included on your income statement or PAYG payment summary – foreign employment This includes amounts shown at Foreign employment income (on an income statement/payment summary) in myTax: Gross payments, Lump sum A, and Lump sum E.	$
b	Total work-related expenses directly related to your JPDA income This includes amounts shown at the appropriate sections in myTax: Union or professional association fees – in Foreign employment income (on an income statement/payment summary) Work-related car expenses Work-related travel expenses Work-related clothing, laundry and dry-cleaning expenses Work-related self-education expenses Other work-related expenses.	$
c	Take row b away from row a. Enter the amount at row c at 'Net foreign employment income' at Foreign employment income (on an income statement/payment summary) in myTax.	$

Did you have work-related expenses?

If you had work-related expenses relating to your JPDA income (that is, you showed an amount at row b in worksheet 1), then you should complete the relevant deductions for work-related expenses in myTax.

These sections deal with deductions for work-related expenses as follows:

Union or professional association fees – in Foreign employment income (on an income statement/payment summary)
Work-related car expenses
Work-related travel expenses
Work-related clothing, laundry and dry-cleaning expenses
Work-related self-education expenses
Other work-related expenses.

Worksheet 2: Foreign income tax offset calculation

If you have more than one income statement or PAYG payment summary – foreign employment showing foreign tax paid, use this worksheet to work out a consolidated foreign income tax offset amount.

You cannot use worksheet 2 if you have:

exempt foreign employment income
other foreign income
unapplied foreign losses from prior years
other foreign income tax offsets available.

If any of the above apply, you may need to read the Guide to foreign income tax offset rules

Worksheet 2
Row	Calculation elements	Amount
a	Your taxable income as shown in myTax	$
b	Tax² on taxable income using our rates and calculators	$
c	Your total net foreign employment income (the amount at row c in worksheet 1).	$
d	Take row c away from row a.	$
e	Tax² on row d.	$
f	Take row e away from row b.	$
g	Total tax paid to Timor-Leste on your JPDA income as shown on all of your income statements and PAYG payment summary – foreign employment.	$

Note 2: This includes any Medicare levy and Medicare levy surcharge payable.

Your foreign income tax offset is the lesser of row f and row g.

If your foreign income tax offset does not exceed $1,000, myTax will automatically complete the Foreign income tax offset.

If your foreign income tax offset exceeds $1,000, myTax will ask you to work out the maximum tax offset you can claim. On Prepare return screen, alongside 'Offsets' section click 'Add/Edit'. Under the 'Foreign income tax offsets' heading enter the offset amount (either row f or row g as advised above).

If you earned JPDA income as an independent contractor (not an employee), apply this table only for taxable income for 1 July 2019 to 29 August 2019. You must apply the ordinary foreign income tax offset rules for your taxable income from 30 August 2019. See Calculating and claiming your foreign income tax offset.

If the Residency status you selected is 'D – Changed residence during the year', go to Part 2 – Resident of Timor-Leste. Otherwise, complete the sections in myTax as shown in the relevant parts. You have now completed these instructions.

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