How to Tell If You’re a Tax Resident in 3 Simple Steps

Knowing if you’re a tax resident in Australia is super important. It decides how much tax you pay and what income you need to report. Tax residency isn’t about your visa or where you live, it’s about your connection to Australia for tax purposes.

Let’s break it down in 3 simple steps to help you figure out if you’re a tax resident.

What Is Tax Residency?

If you’re a tax resident, Australia will tax you on all your income, both from here and overseas. If you’re not a tax resident, you’ll only pay tax on income you earn in Australia.

Step 1: Do You Live in Australia?

This is the easiest one. Do you normally live in Australia?

• If you have a home here and spend most of your time here, you probably live in Australia.

• If you just visit sometimes or your main home is overseas, then you probably don’t.

Step 2: Have You Been in Australia for 6 Months or More?

• If yes, you might be a tax resident.

• But if you have a home overseas and don’t plan to live in Australia permanently, you might not be.

Step 3: Is Australia Your Usual Home?

Where is your usual home?

• If Australia is where you normally live and plan to return to, you’re likely a tax resident.

• Even if you travel overseas for a while, you can still be a tax resident if Australia is your main home.

What If You’re Still Not Sure?

Sometimes it’s tricky to tell. The ATO has an online tool to help you check your tax residency. You can also ask a tax expert for advice.

Why Does It Matter?

Getting your tax residency right is important because:

• Tax residents pay tax on all their income worldwide.

• Non-residents only pay tax on Australian income.

• Mistakes can cause you to pay too much tax or get into trouble with the ATO.

Need Help?

If you’re still unsure, use the ATO’s tax residency tool or talk to Precent’s tax experts. We’re here to help make tax easy for you!