• When your employee is a foreign resident

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    If your employee has answered no to the question ‘Are you an Australian resident for tax purposes?’ on their Tax file number declaration, you will need to use the foreign resident tax rates.

    There are two ways you can withhold from a foreign resident’s earnings:

    • If they have not given you a valid TFN, you need to withhold 47% for each $1 of earnings (ignoring any cents).
    • If they have given you a valid TFN, you need to withhold the amount calculated in the foreign resident tax rates below, rounding any cents to the nearest dollar.

    Foreign resident tax rates

    Weekly earnings
    $

    Weekly rate

    0 to 1,538

    32.5 cents for each dollar of earnings

    1,539 to 3,462

    $500 plus 37 cents for each $1 of earnings over $1,538

    3,463 and over

    $1,212 plus 47 cents for each $1 of earnings over $3,462

    Generally, foreign resident employees cannot claim tax offsets. In limited circumstances, they may be entitled to claim a zone or overseas forces offset. If your foreign resident employee has claimed a tax offset on the Tax file number declaration, you don’t need to make any adjustments to the amount you withhold.

    Last modified: 30 Jun 2014QC 39408