The Australian tax system works pretty similarly to New Zealand. The Australian Tax Office/Department is the equivalent of the IRD in New Zealand.
Your employer will pay the Australian Tax Department/Office tax on your behalf. If you are self-employed, you will need to file your own tax returns, so you will need to get an Australian tax accountant to help you file everything correctly.
On this page, you will find the following helpful information:
The Double Tax Treaty (DTT) between New Zealand and Australia is an agreement signed by both countries to avoid double taxation of income earned by their respective residents.
The DTT outlines the rules for determining which country has the right to tax specific income earned by individuals and businesses in both countries. The DTT aims to eliminate double taxation, reduce the tax barrier to cross-border trade and investment, and promote economic activity between the two countries. It also includes provisions for the exchange of information to assist in the prevention of tax avoidance and evasion.
The DTT covers a range of areas, including income from employment, investments, royalties, and pensions. The agreement also includes provisions for resolving disputes that may arise between the tax authorities of the two countries.
Overall, the DTT helps provide greater certainty and predictability for individuals and businesses active in New Zealand and Australia. It helps to ensure that they are not unfairly taxed in either country due to their cross-border operations.
You can read more on the Inland Revenue website on Double tax agreements (DTAs) or speak to your accountant.
A Tax File Number (TFN) is the Australian equivalent of the New Zealand IRD number. You do not need to have a TFN to work and pay Australian tax. However, you will be charged a higher tax rate. You can start working without a TFN and inform your employer that you have applied for one, but they may still use the higher tax rate until your TFN comes through. The good news is that you may be able to claim the overpaid tax; you can find more info about tax refunds below.
A TFN will get you in line with the PAYG (pay as you go) earn scheme, which means that your Australian employer will withhold and report tax under your TFN. Same as NZ.
The Australian tax year runs from the 1st of July through to the 30th of June.
You should apply for a Tax File Number Aus as soon as you arrive in Australia. You are not able to apply from New Zealand.
You can apply for a tax file number online if you meet these three conditions:
You can apply through the Australia Taxation Office (ATO) by completing the online form on the ATO website, printing the summary and then booking an interview at a participating Australia Post retail outlet. You will need to take your printed summary and proof of identity documents to the interview.
You should receive your TFN within 28-30 days. The ATO will send your TFN to the Australian address you use on your application.
Please note you can start working without a TFN, but you might get taxed a higher amount until it comes through.
Once you have received your TFN, it’s important that you keep it and all your personal information secure to prevent identity theft.
If you already have a TFN and don’t remember the number, you can find it online in ATO online services via your myGov account: https://my.gov.au/.
If you don’t have a myGov account, you can usually find your TFN on:
If you use a registered tax agent/accountant, you can ask them for your TFN. If you still can’t find your TFN after checking these options, phone the ATO.
New Zealand citizens are treated as residents for tax purposes once they complete a stay of six consecutive months in Australia (183 days).
Please find below a table containing the Australian individual income tax rates.
Taxable income | Tax on this income |
0 – $18,200 | Nil |
$18,201 – $45,000 | 19c for each $1 over $18,200 |
$45,001 – $120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
$120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
$180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
The above rates do not include the Medicare levy of 2%. You can work out your Medicare levy using the calculator on the ATO website.
If you do not stay in Australia for six months (183 days), you will be treated as a foreign resident for tax purposes. This means that you are not allowed to use the tax-free threshold in your return (earn under $18,200), and you will be charged the starting tax rate of 32.5%. You would be eligible to claim a tax refund only if your Australian employer withholds more than 32.5% in tax, and you will get the difference, meaning only the overpaid amount of tax. TaxBack.com can help you with this.
Taxable income | Tax on this income |
0 – $120,000 | 32.5 cents for each $1 |
$120,001 – $180,000 | $39,000 plus 37 cents for each $1 over $120,000 |
$180,001 and over | $61,200 plus 45 cents for each $1 over $180,000 |
Once you have your TFN, you will pay the same tax rate as an Australian resident or citizen.
The standards the ATO uses to determine your tax residency are not the same as those used by the Department of Immigration and Border Protection – for example, you could be an Australian resident for tax purposes even if you’re not an Australian citizen or permanent resident.
To understand your tax situation, you first need to work out if you are an Australian or foreign resident for tax purposes. You can do that here using the ATO’s ‘Are you a resident?‘ tool.
You do have the option to be an Australian “temporary resident” for tax purposes.
There can be some benefits for New Zealand citizens living in Australia who are considered temporary residents for tax purposes. This is because, as temporary residents, they may be eligible for certain tax concessions and exemptions, including:
You can read more about this in Beyond Accountancy’s post: NZ taxes: something every Kiwi in Australia needs to know.
However, it’s important to note that these benefits depend on individual circumstances and may not apply to all temporary residents. It’s always best to consult a qualified tax professional who can provide tailored advice based on your situation.
If you’ve ever worked Down Under, you probably paid tax and are due an Australian tax refund. This calculator is FREE to use and will give you an instant Australian tax refund estimation. The average Australian tax refund with taxback.com is AU$2,600, so it’s well worth checking out the online tax calculator now. Use TaxBack’s Australian tax refund estimator now, and you will be one step closer to getting your Oz tax refund!Australian Tax Calculator facts
Taxback.com provides personal & corporate tax solutions. They will help you claim tax refunds and file tax returns. Get your tax back today! |
The Australian financial year runs from 1 July until 30 June each year. Individuals have until 31 October to lodge tax returns on their own. If you use a tax agent, you can secure an extended deadline.
New Zealand citizens are not required to lodge a tax return if they have not commenced paid employment or stayed in Australia for less than six months, and the only source of Australian income was bank interest, dividends or royalties (from which non-resident withholding tax has been correctly withheld).
You must lodge a tax return if any of the following apply:
People submit a tax return mainly to claim overpaid tax and get a tax refund.
If your finances are straightforward (for example, your only income is from one employer, and you have few or no deductions to claim), try doing it yourself online via myTax, which is similar to MyIR with the IRD. Find here instructions to help you complete your tax return using myTax – https://www.ato.gov.au/Individuals/myTax/.
For more information, read my filing for your Australia Tax Return post.
Lodging a tax return can be daunting if you are not a professional. To ensure maximum legal refund and compliance with the Australian Authorities, you should use an Australian Tax Agent/Accountant.
You can find accountants in your area by searching online. Make sure you check the tax and BAS agent register before you go ahead with any service.
If you plan on starting your own business and working as a sole trader contractor or sub-contractor, you must apply for an Australian Business Number or ABN. Same as you would apply for a New Zealand Business Number (NZBN) in NZ.
ABN is a unique 11-digit number that identifies your business or organisation to the government and community.
To apply for such you must have obtained a Tax File Number first.
You can apply for ABN by registering directly with the Australian Government – https://www.abr.gov.au/business-super-funds-charities/applying-abn.
Taxback.com can also help with this matter to ensure a trouble-free application. Check out more information on their webpage – ABN application. Service fee applies.
New Zealand tax residence questionnaire IR886
The IR886 form tells the IRD you are leaving or have left New Zealand so they can tell you your tax residence status and if you have any further New Zealand tax obligations. It also includes the IR597 form you can use to elect someone in New Zealand to act on your behalf.
Also, inform the IRD of your new address in Australia when you have one. It is easiest to do this online. Click here to register for the IRD’s online service, which means you can easily update your address while overseas and continue to be informed about things like student loan repayments or other tax obligations you may have.
The below posts might interest you:
If you’ve read the above content and the answer to your question isn’t there, please write a comment below, and I’ll research the answer for you.
If you need advice on moving to Australia from New Zealand, I’ve created a helpful little questionnaire to point you in the right direction. It takes less than 30 seconds, so give it a go!
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Malcolm
May 14, 2024 at 5:11 pmHi JJ,
I wanted to find out what I should be considering as I wish to help my daughter in Melbourne get together a deposit for a home. Is there any impediment to my gifting $40,000 to her?
I look forward to your reply.
Regards,
Malcolm
JJ Smith
May 15, 2024 at 2:38 pmHi Malcolm,
Thank you for your comment.
The only implication I can think of that you might be concerned about would be tax. Good news is, a gift from a foreign resident, whether it’s money or an asset, is treated the same as a gift from someone who is an Australian resident for tax purposes:
Source: https://community.ato.gov.au/s/article/a079s0000009GnFAAU/tax-on-gifts-and-inheritances.
In Australia, gifts and inheritances are generally not considered as income and don’t require you to pay any Australian taxes.
The ATO define a gift with the following criteria:
– there is a transfer of money or property.
– the transfer is made voluntarily.
– the donor does not expect anything in return.
– the donor does not materially benefit.
If your gift fits the above criteria, you and the gift giver don’t pay tax on it. There’s no limit on how much money you can give or receive as a gift!
However, there are some occasions where tax may be payable, or capital gains tax (CGT) may apply. For example, in some instances when gifting property, shares or crypto assets, or when receiving money or an asset from a non-resident trust.
I recommend looking into how you are going to transfer your money to Australia, as online foreign exchange companies offer much better rates, with little to no fees, compared to banks. You can read more in my Foreign Exchange/Money Transfer post: https://www.movingtoaustralia.co.nz/foreign-exchange-money-transfer/.
Please let me know if there was something else you were concerned about other than tax.
Thanks
Cassie
April 23, 2024 at 12:15 pmHi,
My family and I are moving to Australia in May 2024, our home will be sold a few days AFTER we land (Settlement date) in Australia, will I need to pay any CGT? It’s unclear to me when I become an Australian tax resident.
I’m not paying CGT/bright line rule here in NZ as it is our primary home we have lived in for 7+ years.
JJ Smith
May 1, 2024 at 6:18 pmHi Cassie,
Thanks for your comment. Sorry for the delay in replying.
Unfortunately, I am not a financial adviser or accountant and cannot advise you on your individual circumstances.
When you move to Australia and become a tax resident there the ATO take that date as the date you became owner of your assets. This is known as ‘deemed acquisition”. You may then be liable for CGT on any gain the property made from this date until the date you sold it.
The below links might be able to help you understand the above more:
– https://community.ato.gov.au/s/question/a0J9s000000OUna/p00201380
– https://community.ato.gov.au/s/question/a0J9s000000QAQx/p00214984
Here is a capital gains tax calculator: https://www.loans.com.au/calculators/capital-gains-tax-calculator.
Please let me know if you need further assistance, as can give you the details of an accountant who specialises in the area of Australian PR and citizens owning property in NZ. He will definitely be able to help you.
Please feel free to email me back any further questions you have.
Good luck with your move.
Terry
March 17, 2024 at 12:51 pmHi JJ,
Thank you for your website. It’s very comprehensive and helpful.
I thoroughly read your advice about opening a bank account but our situation is a bit complex.
You may have heard of people sharing our profile.
Our two sons have lived in Australia since last year. We are considering moving too, but we must sell our business first. Because it was severely affected during the Covid crisis, we will need two more years to show a clean sheet to the potential buyers.
However, we would like to invest some money (shares and/or property) in Australia already.
In this regard, we need a bank account. According to your website page/ CommBank, we can easily do it online and pick the Eftpos card up when we visit.
The problem is the Australian tax number that we need, if we want to invest as it takes up to 28 days before getting it. We can’t spend a month over there as we are too busy in NZ. Nevertheless, I guess, we need to be in Australia while our application is processed.
Would you have any knowledge in this particular topic or refer us to someone who could help?
I look forward to hearing from you.
Thank you very much.
Kind regards
Terry
JJ Smith
March 18, 2024 at 4:02 pmHi Terry,
Thank you for your message and compliment.
From what I’ve been able to find out, you are able to leave Australia while your TFN application is being processed:
You can leave Australia, however your TFN advice letter will be posted to the Australian address you provided on your application. So if you’re overseas you won’t receive it by post.
Source: https://community.ato.gov.au/s/question/a0J9s000000RMPuEAO/p00224392.
Therefore, when applying make sure to use an address of a friend or relative who can pass it onto you. You should use the same address on your CommBank application for ID pruposes. You would then update the ATO when you return to Australia.
If you want to read more, here is the Google search I did: https://www.google.com/search?client=firefox-b-e&q=do+you+need+to+stay+in+australia+while+waiting+for+tfn#ip=1.
Hope the above helps.
Mark
March 5, 2024 at 8:59 pmHi, my question is do you know of any dual country tax advisers?
I am retired but not at a retirement age.
I have investments in NZ , rentals and term deposits which I live off and don’t want to be taxed twice.
I’m worried just using a NZ accountant may not be up to speed with what goes on in Australia.
Thank you for an amazing website too.
Cheers
JJ Smith
March 8, 2024 at 3:22 pmHi Mark,
Thank you for your comment and compliment.
Are you living mainly in Australia?
I can recommend Craig Byron for an Australian accountant. I have been referring people to his old company for many years, as he understands the legislation for New Zealand citizens living in Australian while owing assets in NZ and Australia and has a lot of experience in the area.
He has recently branched out on his own so I cannot refer you to a website yet, but he confirmed he is happy help you. I will email you direct.
Craig has advised me that you really need two accountants with cross-border experience. One to do the NZ side, and his company do the Australian side.
There isn’t a single person he’s aware of that can do both NZ and Australian returns. There are bigger firms, but you still need two separate accountants.
Hope the above helps.
Thanks
Mark
March 8, 2024 at 3:53 pmFantastic thanks so much
Av
April 8, 2024 at 6:05 pmHi JJ,
I wondered if I could please get Craig’s contact details as well?
We are about to move to Brisbane and have been advised to sell our home here instead of renting it out. Would love to use an experienced accountant while in Australia.
Thank you!
JJ Smith
April 11, 2024 at 12:24 pmHi Av,
Sorry for the delay in replying. Your comment got spam filtered, so I missed it.
I’ve emailed you.
He’s great and will definitely be able to help you.
Thanks
Sheree Tidswell
May 5, 2024 at 6:26 pmHi JJ,
Could I please grab Craig’s details too. We’ve just moved to Oz but have a rental in NZ and it’s our first time navigating tax obligations of both countries.
Cheers,
Sheree
JJ Smith
May 6, 2024 at 9:59 amHi Sheree,
Thanks for your comment.
Of course, I’ll email you now.
It’s great having a specialist accountant to be able to recommend, as it’s such a niche area.
Please feel free to email me back any further questions you have.
Sheree Tidswell
May 6, 2024 at 3:04 pmHey JJ,
Thanks for getting back to me so quickly and with Craig’s contact details.
Your website has been so extremely helpful. I recommend it to anyone who is moving from NZ to Australia. Your blog on buying property has helped us to persevere with finding a mortgage broker that understands what Kiwis are entitled to in Oz.
Hope you have a great labour day weekend.
Morgan Coombes
May 14, 2024 at 3:34 pmHI JJ
I too am searching for Craig’s details (he is a popular guy!) Are you able to shoot me an email too, please?
Thank you,
Morgan
JJ Smith
May 17, 2024 at 1:17 pmHi Morgan,
Thanks for your comment. Sorry for the delay! And yes he is a popular guy 😉
I’ve emailed you.
Please feel free to email me back any further questions you have.
Hannah B
May 29, 2024 at 5:44 pmHi JJ
Could I please receive Craig’s details as well?
Thank you
JJ Smith
June 4, 2024 at 2:58 pmHi Hannah,
Thanks for your comment.
Of course, I’ll send you Craig’s email.
I know he is busy with EOY on June 30, but I’m sure he will be in touch.
Please feel free to email me with any further questions you have.
Wendy A
March 1, 2024 at 11:28 amHi there,
I am planning on moving to Australia in mid-April, however I have been offered a permanent position and starting this remotely from New Zealand in mid-March. If I am paid this into my New Zealand bank account before leaving, would this be taxed in AU/NZ? Note it is an AU company operating in AU.
As I cannot set up an AU bank account to receive money before I am there in person.
What do you suggest is the best way of approaching this? It will only be 1 months worth of income.
Thank you very much.
JJ Smith
March 1, 2024 at 12:44 pmHi Wendy,
Thank you for your comment.
Unfortunately, I am not an accountant and can only advise from information I have been able to find online.
Since you are still going to be an New Zealand tax resident until you move to Australia, you will need to include the salary/wages on your NZ tax return.
You can read more on IRD’s website, overseas income: https://www.ird.govt.nz/income-tax/income-tax-for-individuals/types-of-individual-income/overseas-income.
I don’t know if this will help, but I work with Australian companies on an invoice bases. This income is zero-rated, so if the company was willing to start you on a month contract, this would be quite a different tax situation.
Please note, you also won’t have an Australian Tax File number until you have been able to apply after you arrive.
Hope the above helps.
Good luck with your move.
Ryan and Andry
February 10, 2024 at 10:55 amHello JJ,
I have a quick question which hopefully you know the answer too. My wife and and are New Zealand Citizens and are considering moving to Australia this year, however we will continue working for our New Zealand based companies as employees – earning NZD into our NZ bank accounts (Both jobs are full time from home).
How does this work with regards to tax, kiwi saver etc. What forms need to be completed and is there anything else we need to do with our employers before coming.
Thank you in advance,
Ryan and Andry
JJ Smith
February 16, 2024 at 1:57 pmHi Ryan,
Thank you for your message and sorry for the delay in replying.
You are going to have to rely heavily on your accountant to get this right for you both.
There is a Double Tax Treaty between NZ and Australia. The Double Tax Treaty (DTT) is an agreement signed by both countries to avoid double taxation of income earned by their respective residents. Read more on the IRD website: https://www.ird.govt.nz/international-tax/double-tax-agreements.
You’ll need to know your tax residency status. This will help you understand how New Zealand’s tax laws and DTAs apply to you. In New Zealand, you’ll either be a:
– non-resident taxpayer
– New Zealand tax resident.
You’ll also need to know your overseas tax residency status.
Once you work out your tax residency status, you can see how DTAs may affect how certain types of income are taxed. It’s also possible to be a tax resident in both New Zealand and another country or territory.
So have a good read of Double tax agreements (DTAs) on the IRD website and then have a chat to your accountant and see what advice they have for you. If they are not familiar with your situation, I recommend finding an accountant who is.
Hope the above helps.
Chris
January 11, 2024 at 5:40 amDear JJ Smith
The article above states – ‘New Zealand citizens are treated as residents for tax purposes once they complete a stay of six consecutive months in Australia (183 days).’
I’ve been living in Australia for 5 months and I’m about to visit NZ for 8 days and then return to Australia. Will the 8 day absence from Australia effect the 6 month criteria I require to apply as a resident for tax purposes.
Thank you
JJ Smith
February 16, 2024 at 2:03 pmHi Chris,
Thank you for your comment and I’m so sorry I’m only answering it now.
If you are earning money in Australia, then they will already be hoping you will be a Australian resident for tax purposes. You can be either a resident of Australia, NZ or both for tax purposes.
It will be up to your account to advise you on what is the best option for you. However, if you have no NZ based income or investments, then being an Australian resident for tax purposes will be the most straight forward option.
Hope the above helps.
Please feel free to email me back any further questions you have.
Debbie
October 18, 2023 at 2:57 pmHi, my husband and I lived in Australia for 4 years and then returned to nz, if we return to live in Australia can we still use the same tax number we had when we were living there or do we need to apply for new ones when we arrive, thank you so much for this helpful site.
JJ Smith
October 26, 2023 at 12:18 pmHi Debbie,
Thanks for your comment.
Yes, you use the same tax file number (TFN) when you return.
Your TFN is: a unique number (usually 9 digits) an important part of your identity. Yours for life – you keep your TFN even if you change jobs or name, move interstate or go overseas.
Thanks
Amar
October 6, 2023 at 3:21 pmHi there,
I am planning to move to Australia from New Zealand. I want to discuss the options for NZ Citizens to buy a property in Australia specifically in Sydney.
I have existing properties in NZ and am not disposing of any of my properties here but I am looking forward to investing in a house in Australia for my living.
Is it possible for you to arrange a call via WhatsApp.
Also, please let me know if there is any fees for this.
Kind Regards,
Amar
JJ Smith
October 12, 2023 at 5:36 pmHi Amar,
Unfortunately I am not a financial adviser and cannot advise you sorry.
If you are looking for a mortgage, I recommend booking a consultation with UNO through their questionnaire in this post: https://www.movingtoaustralia.co.nz/australian-mortgage/. UNO understand a New Zealanders circumstances when they move to Australia, e.g. SCV, NZ equity and Australia government grants. They also have an amazing technology when it comes to home loans.
If you are wanting tax advice, I recommend contacting Beyond Accountancy. Check out this post of theirs, you will see they also understand having properties in NZ and living in Australia: https://beyondaccountancy.com.au/something-every-kiwi-in-australia-needs-to-know/.
Here is some of my posts that will be of interest if you haven’t read them already:
– Buying a house in Australia – https://www.movingtoaustralia.co.nz/buying-a-house-in-australia/
– Australian Mortgage – https://www.movingtoaustralia.co.nz/australian-mortgage/
– Foreign Exchange/Money Transfer – https://www.movingtoaustralia.co.nz/foreign-exchange-money-transfer/
– KiwiSaver for your Home Deposit – https://www.movingtoaustralia.co.nz/kiwisaver-for-your-home-deposit/
– Australia’s First Home Owners Grant – https://www.movingtoaustralia.co.nz/australias-first-home-owners-grant/
Hope the above helps.
MJ
June 26, 2023 at 9:04 amHi,
I’ll be moving to Australia from New Zealand to live there permanently yet it won’t let me sign up for Australian TFN. But I’m assuming I need a tax number if I’m wanting to get a job correct? Am I using to wrong application? I’m very confused. Could you send me a link on where I can apply for Australian TFN thanks!
JJ Smith
June 26, 2023 at 10:20 amHi MJ,
As stated in the Australian Tax post, you cannot apply for a TFN from New Zealand.
After you have arrived you can apply and here are the instructions: https://www.movingtoaustralia.co.nz/australian-tax/#howtoapplyforTFN.
Good luck with your move.
Nicole
June 16, 2023 at 7:55 pmHi JJ,
I hope this message finds you well.
I’m writing to you today because I’m moving to Australia next month (permanently) with a permanent job offer. My current employer in New Zealand wants me to continue working for them for around 10 hours a week. They have given me the following options:
1. Work as a part-time employee and they will pay my PAYE to the IRD.
2. Work as a contractor where I will invoice them for the hours I work at our agreed rate and I will be responsible for managing my own taxes.
I’ve read your blog and found it to be very informative. I was wondering if you have any experience with this situation? If so, do you have any advice on which option is the best for me?
Thank you for your time and consideration.
JJ Smith
June 19, 2023 at 11:23 amHi Nicole,
Unfortunately, I’m not an accountant and don’t know the full implications of both options.
What I do know… you will not have to pay tax twice, because of the Double Tax Treaty (DTT), which ensures that you are not unfairly taxed in either country due to cross-border operations.
I recommend you call your accountant or the IRD and ask them.
Personally, I would get them to pay the PAYE and deal with the tax issues when you lodge your tax returns (NZ and Australia). Either way, you are probably going to need an accountant to help you.
Hope the above helped.
Ellen Dunster
June 7, 2023 at 1:39 pmHi, your site is the best I’ve found!
My partner is self employed in NZ and had been offered a one month contract in Melbourne for an Australian company. Does he need to do anything re tax in Australia or does he just submit as part of his income in NZ (ie same as he does for his NZ income). Also does he have to pay Medicare? Assume he will not get super? Thank you.
JJ Smith
June 19, 2023 at 2:20 pmHi Ellen,
Unfortunately, I am not an account, so can’t really advise you.
As he will be working in Australia for less than 6 months, I don’t think he needs to file an Australian tax return.
However, I recommend that he talks to his accountant about his obligations and the IRD if he doesn’t have an accountant.
I don’t know if he will still have to pay Medicare and super sorry. I think these are subtracted automatically.
I hope the above helps.
Misael Jr Diputado
May 15, 2023 at 3:07 pmHi JJ,
I am a New Zealand citizen and currently in Sydney. I work for a NZ company which allows me to work remotely here in Sydney for as long as I want. Do I have tax obligations in Australia?
Thanks,
Misael
JJ Smith
May 16, 2023 at 11:22 amHi Misael,
Thanks for your comment.
I don’t know a lot about working remotely, but you can choose as an NZ citizen to be an Australian resident for tax purposes or not. I recommend you talk to your accountant about this. Here is some information on being a temporary resident for tax purposes: https://beyondaccountancy.com.au/something-every-kiwi-in-australia-needs-to-know/.
NZ and Australia also have a tax treaty so that you will not pay double tax on your income. Here is some info: https://nztaxprop.co.nz/tax-services/double-tax-treaty/.
I recommend you talk to your account about what is the best option for you.
Please feel free to email me back any further questions you have.
Good luck with your move.
Ainslee
February 19, 2023 at 11:57 pmHi I was wondering if I could confirm a few things.
I’m planning to move to Australia from nz for around 3 months for work during my gap year.
Even though I’m spending less then 6 months there as soon as I receive my TFN I will be treated as an Australian resident for tax reasons correct?
And if I only start working after I receive my TFN number since I’ll be earning in the lowest tax bracket and therefore not be taxed anything, will I still have to file a tax return?
If I do have to file a tax return will I have to include work that I did while in nz or just include any income earned while working in Australia?
Final bit:
Do I have to let IRD know that I plan to move temporarily to auz? I have a student loan so I’m curious as to what will happen in regards to that while I’m in auz.
Thank you for your help this is bit confusing.
JJ Smith
February 20, 2023 at 10:14 amHi Ainslee,
Thank you for your comment.
It is a bit confusing since you are only going for a short period. You fall into the backpacker category, rather than resident.
You are considered a resident from a fiscal point of view after living 6 months in the same place in Australia (not necessarily to the same address, but in the same geographical area or in the same city, Sydney and the surrounding area for example) provided that you are able to prove it. To declare you as a resident from a taxes point of view, residents are taxed less than non-residents, the first level of taxation for residents is $18,200.
This means that if you earn less than the $18,200 threshold and have been in the same place for 6 months, you will get all of your tax refunded.
Have a read of this post, which is more applicable to you since you are staying in Australia for less than six months: https://www.australia-backpackersguide.com/how-to-claim-tax-back-australia/.
I recommend getting a TFN so that you don’t have to pay the higher tax rate. Then when you leave complete a tax return through the ATO website and hopefully you will get your tax back. Remember to keep transport receipts and any other expenses you incur to do with work, e.g. special shoes.
Regarding your student loan, as you are not going overseas for more than 6 months, you don’t have to worry about your student loan because it will remain interest-free.
If you’ll earn a New Zealand salary or wages while you’re away, you’ll still be required to have student loan repayments deducted from this income.
If you earn any other income from New Zealand and/or overseas income while you’re away, you’ll need to let us know after the end of the tax year (31 March). This is because you’re still a New Zealand- based borrower and your repayments are based on your worldwide income.
If you have any other repayment obligations due while you’re away or would like to make voluntary repayments, there are a number of ways you can make a payment.
You can read more about your NZ student loan here: https://www.movingtoaustralia.co.nz/student-loans/.
Please feel free to email me back any further questions you have.
Good luck with your move.
Ainslee
February 20, 2023 at 10:41 amSorry just to clarify… If I were to get a TFN number before staying there for 6 months will I then start paying less tax eg if earning under 18,000 ish no tax, as soon as i get the TFN number?
Or do I continue to pay higher tax rates even if I require a TFN during the first 6 months?
JJ Smith
February 20, 2023 at 11:36 amPlease note, I am not an accountant and can only advise from what I’ve read online.
A TFN will drop the amount of tax your employer deducts, so you will get more in your hand every week.
Then if you earn less than $18,000 you should get the tax you paid back when you lodge a tax return.
Hope the above helps.
Mandy
November 3, 2022 at 10:19 pmYour site has been so informative, thank you!
I am a NZ Citizen. I intend to find a job in Australia and stay for 2-3 years.
My question for you: What is the best circumstance for me if I want to avoid AOT from taxing me for capital gains tax if I sell my investment house in NZ.
1. Resident for tax purposes –
a. .if I stay in Australia for 2-3 years, am I considered a Resident for tax purposes?
b. If I want to return to NZ to sell my properties, is there a timeframe for how long I have to stay for, to avoid AOT from taxing me for capital gains? Ie. does my residency in AU reset?
2. Non-resident for tax purposes – Can I continue being a non-resident even if I intend to stay for 2-3 years?
Looking forward to your reply.
Mandy
JJ Smith
November 4, 2022 at 11:35 amHi Mandy,
Thank you for your comment.
I am not an accountant so can only advise from the information I can find online.
If you sell your investment property while living in Australia then you will be liable for CGT. If you want until you return to NZ, then you will not as your CSV expires as soon as you leave Australia.
What you also need to consider is your rental income while living in Australia. This is where being a temporary resident would benefit you, as temporary residents are generally exempt from tax on their overseas income.
Contrast this with permanent residents or Australian citizens. As long as we remain residents for tax purposes we have to pay tax on any source of income, foreign or domestic, whereas a temporary resident living and working in Australia generally will only need to pay tax on Australian income and employment income overseas.
Any bank interest, share dividends, rent from a property and capital gains are usually disregarded (that is, tax-free).
As long as a Kiwi remains a “temporary resident” for tax purposes, they could have 5 investment properties, all earning rent and making capital gains. The Australian taxman can’t touch a cent.
What you need to do is make sure you get an accountant that understands the temporary resident rules and can apply them to you. I know Beyond Accountancy do, because of this blog post NZ taxes: something every Kiwi in Australia needs to know (https://beyondaccountancy.com.au/something-every-kiwi-in-australia-needs-to-know/).
Please feel free to email me back any further questions you have.
Good luck with your move.
Evan
June 7, 2023 at 12:12 amDear JJ Smith,
Outstanding website. Thank you. So much great information.
I am replying to this particular thread with but one specific question!
I’m a NZer having been offered work in Aus but as an independent contractor, requiring I set-up an ABN as a sole trader in Aus.
From what I can gather, once I’ve set-up the ABN and sole trader status, this will impact tax on my rental returns from NZ (i’ll need to pay additional to the Aussie tax man), potentially leading to a change of tax from temporary to permanent?
Have you heard of others in the same boat?
Kindest
Evan
JJ Smith
June 19, 2023 at 2:01 pmHi Evan,
Thanks for your comment and compliment.
Unfortunately, I’m not an accountant, but I do agree with you that once you have an ABN you will be an Australian permanent resident for tax purposes and they will want a slice of your rental returns.
I recommend you contact Beyond Accountancy, as they appear to have the best knowledge of tax rules for New Zealand citizens living in Australia and they might know a loophole you can use: https://beyondaccountancy.com.au/something-every-kiwi-in-australia-needs-to-know/.
Please let me know if you learn anything that I can share with other visitors.
Good luck!