Income tax rates for foreign residents and working holiday makers
If you're a foreign resident for tax purposes, you pay tax from the first dollar. Working holiday maker rates are different again. How residency is decided and why getting it wrong hurts.
Published 17 May 2026 · Last reviewed 17 May 2026
If you're a foreign resident for tax purposes (different from your visa status — this depends on where you live and where your ties are), you pay tax from the first dollar of Australian-sourced income.
| Taxable income | Tax on this income (2025–26) |
|---|---|
| $0 – $135,000 | 30c for each $1 |
| $135,001 – $190,000 | $40,500 plus 37c for each $1 over $135,000 |
| $190,001 and over | $60,850 plus 45c for each $1 over $190,000 |
Working-holiday-maker tax rates are different again — usually 15% on income up to $45,000 and then resident-style rates above. Verify at https://www.ato.gov.au/tax-rates-and-codes/tax-rates-working-holiday-makers
Resident vs foreign resident — the distinction matters
- Most newcomers who move to Australia with the intention to stay (with a partner, on a long-term work visa) are tax residents from day one.
- The 183-day rule is a rough guide but isn't the only test — the ATO looks at your domicile, ties to Australia, and behaviour.
- Most temporary visa holders end up as residents for tax purposes once they're settled.
- If unsure, the ATO's residency test tool is the starting point: https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency
If you tick the wrong residency status on your TFN declaration, your employer either over- or under-withholds. Either way, you reconcile at tax-return time — but cash-flow during the year can be painful. Fix it with HR as soon as you spot it.