Non-Resident Tax Rates: How to Determine Your Residency Status

[Updated September 2025]

Tax time is approaching, and understanding non-resident tax rates in 2025 can make it smoother. For the 2024-2025 tax year, non-residents face these rates: 30% on income up to $135,000, $40,500 plus 37% on income from $135,001 to $190,000, and $60,850 plus 45% on income over $190,000. You want to file your return correctly and get your refund quickly. For many, this process is straightforward, but non-residents may find it helpful to navigate Australian tax laws with guidance.

This guide breaks down non-resident tax rates in 2025. It helps you understand your obligations and start your tax return process with confidence.

Quick Summary

• Non-residents pay tax only on Australian income; rates start at 30% with no tax-free threshold.
• Use tests like the resides test or 183-day test to find your residency status.
• Working holiday makers have a special rate of 15% on the first $45,000.
• Temporary residents often get resident rates for better tax outcomes; foreign income is exempt.
• Withholding tax is 10% on interest and 30% on unfranked dividends and royalties, unless a treaty applies.
• Contact us for a free estimate and same-day refund options.

What is the Non-Resident Tax Rate for 2024-2025?

For the 2024-2025 tax year, non-residents pay these rates.

Foreign Resident Tax Rates 2024–25

Source: ATO 2025

Non-residents do not pay the Medicare levy.

Resident vs Non-Resident – Why Does It Matter?

Your status affects your tax. Residents pay on all income worldwide. Non-residents pay only on Australian income, but at higher rates. Banks hold 10% tax on interest for non-residents.

How to Determine Your Residency Status for Tax Purposes

The ATO uses tests to decide your status.

1. The Resides Test

This main test looks at factors like:

• Job or business in Australia
• Family settled here
• Plan to stay long-term
• Assets like a home or car
• In Australia over six months
• Daily life ties, such as friends or services

2. The Domicile Test

Domicile is your permanent home base. If it is outside Australia, you may not be a resident.

3. The 183-Day Test

If you stay 183 days or more in a year, you are likely a resident; unless your home is abroad and you do not plan to settle here.

4. The Commonwealth Superannuation Fund Test

If you qualify for certain super funds or are a spouse or child under 16 of someone who does, you count as a resident.

Source: ATO 2025

What are Some of The Advantages and Disadvantages of Residency?

Residents:

• Pay on global income
• Pay Medicare levy
• Get lower tax rates
• Handle capital gains tax on more assets
• Pay standard tax on bank interest

Non-residents:

• Taxed only on Australian income
• No Medicare levy
• Cannot claim some offsets
• 10% tax on bank interest
• Higher tax rates
• Capital gains tax on property, not shares

Do Working Holiday Makers Get Taxed Differently?

Yes, they have their own rates.

Differences

1. Tax Rate Structure:

• Foreign residents start at 30% from the first dollar.
• Working holiday makers start at 15% up to $45,000, then higher rates.

2. Initial Tax Rates:

• Foreign residents: 30c for each $1 from 0 – $135,000.
• Working holiday makers: 15c for each $1 from 0 – $45,000.

3. Income Brackets:

• Working holiday makers have a lower starting rate.

4. Thresholds for Higher Rates:

• Working holiday makers shift to higher rates after $45,000; foreign residents start high.

5. Medicare Levy:

• Neither group pays it.

Working Holiday Maker Tax Rates 2024–25

Source: ATO 2025

How About Temporary Residents?

Many with temporary visas count as residents for tax. This gives lower rates. You qualify if you hold a temporary visa, are not an Australian resident under social security laws, and your spouse is not an Australian citizen or permanent resident. Foreign income is exempt from tax.

What is the Withholding Tax Rate for Non-Residents?

It is 10% for interest and 30% for unfranked dividends and royalties. Lower rates may apply under tax treaties.

Source: ATO 2025

Can I Get My Tax Refund Instantly?

Fill out our online form for a quick call. Get a free estimate. Choose refund in one hour or wait. We lodge your return fast. Get your tax refund today!

Disclaimer: This is general info. It does not fit your case exactly. Talk to our registered agents for advice.

FAQs

What is a non-resident for tax purposes in Australia?

Someone who does not live in Australia or stays less than six months in a year.

What is the Australian non-resident tax rate?

Non-residents pay 30% on income up to $135,000. Higher income faces 37% or 45%.

Do non-residents have to pay tax on income earned outside of Australia?

No, only on Australian income.

Do non-residents have to pay tax on rental income from Australian property?

Yes, at standard non-resident rates with no tax-free threshold.

Are there any exemptions for non-residents on certain types of international work?

Yes, for foreign government staff or some international groups.

What is the CGT discount for non-residents in Australia?

Non-residents get no 50% discount for assets acquired after 8 May 2012. Gains add to income and tax at non-resident rates. For earlier assets, the discount is partial based on residency periods.

Source: ATO 2025

How is residency status determined for tax purposes in Australia?

By ATO tests like time here, ties, and intent.

What are the four tests for residency of individuals in Australia?

Resides test; domicile test; 183-day test; super fund test.

Are there any tax treaties between Australia and other countries that affect non-resident tax rates?

Yes, to avoid double tax and support trade.

Are there any changes to non-resident tax rates in Australia expected in the near future?

No big changes to income tax rates soon. But from 1 January 2025, foreign resident capital gains withholding rate increases to 15% with no threshold.

Source: ATO 2025