How many residency tests does Australia apply and do I need to satisfy all of them?

Australia applies four alternative tests under s6(1) of the Income Tax Assessment Act 1936. Satisfying any one is sufficient for Australian tax residency -- the tests are not cumulative. The four tests are: the ordinary-concepts (resides) test, the domicile test, the 183-day test, and the Commonwealth superannuation test. A filer who clearly fails all four tests is a non-resident [SC1].

What tax rate applies to non-residents on Australian income in 2025-26?

Non-residents are taxed at 30% on Australian-source income from Australian dollar zero to Australian dollar 135,000, 37% from Australian dollar 135,001 to Australian dollar 190,000, and 45% above Australian dollar 190,000, with no tax-free threshold and no Medicare Levy. Residents, by contrast, pay nothing on the first Australian dollar 18,200. The rate difference is significant for lower-income earners who cross the residency boundary [SC2].

Can I break Australian tax residency by moving overseas?

Ceasing residency requires satisfying the ATO that none of the four tests applies in the relevant income year. The domicile test is the main barrier: Australians retain an Australian domicile of origin unless they establish a permanent domicile of choice overseas -- which requires both a change of residence and an intention to remain permanently or indefinitely. Moving abroad on a time-limited contract without a fixed foreign home typically does not displace Australian domicile [SC1] [SC3].

Is the new bright-line 183-day residency model in force?

No. As of 8 June 2026, the proposed primary bright-line test (automatic residency for 183 or more days of physical presence) has not been legislated. The proposal emerged from the 2021-22 Federal Budget and a Treasury consultation that closed in September 2023; no formal government response has been released and no amending bill has been tabled. The four-test common-law framework under s6(1) ITAA 1936 remains operative [SC4].

Do non-residents need an Australian Tax File Number?

Yes, in practice. Without a Tax File Number, Australian payers must withhold tax at the top withholding rate (47% for residents, 45% for non-residents) on interest, dividends, and other passive income -- rather than applying the lower non-resident withholding rates. Non-residents and individuals living outside Australia can apply using the ATO's NAT 2628 form, sending certified identity documents to the address on the form [SC5].

Expat Tax Residency in Australia — Rates, Rules & Filing

Australia applies a four-test framework under s6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) to determine whether an individual is a tax resident in a given income year. Satisfying any one test is sufficient for residency -- the tests are alternatives, not cumulative. The Australian Taxation Office (ATO) set out its consolidated position in Taxation Ruling TR 2023/1, which replaced the earlier IT 2650. The stakes are material: residents are taxed on worldwide income at resident marginal rates, while non-residents are taxed only on Australian-source income but at higher flat rates with no tax-free threshold.

What is the ordinary-concepts ("resides") test and who does it affect?

The primary test asks whether the individual resides in Australia under the ordinary meaning of the word -- dwelling permanently or for a considerable time, having a settled or usual abode in a place. TR 2023/1 focuses on the nature, quality, duration, and intention of the individual's physical presence in Australia and whether the individual treats Australia as home. Relevant factors include physical presence, family and social ties, employment ties, Australian assets and bank accounts, and frequency of return visits. No single factor is conclusive. An expat who maintains a family home in Australia, has a spouse and children there, and returns regularly may satisfy the resides test even while spending most of the year offshore [SC1].

What is the domicile test and how does "permanent place of abode" work?

An individual is an Australian resident under the domicile test if their domicile is in Australia AND the Commissioner is not satisfied that their permanent place of abode is outside Australia. Domicile -- the country a person regards as their permanent home -- is governed by the Domicile Act 1982: domicile of origin is assigned at birth; domicile of choice requires both a change of residence and an intention to remain permanently or indefinitely. Most Australians retain an Australian domicile of origin unless they formally establish a domicile of choice elsewhere. The Federal Court in Harding v Commissioner of Taxation (2019) confirmed that "permanent place of abode" requires a definite locality where the individual is residing in a permanent way -- moving between countries without settling in any one will not displace Australian domicile. An engineer on successive overseas contracts without a fixed foreign residence was held to retain Australian residency in an Administrative Review Tribunal decision affirmed in March 2025 [SC1] [SC3].

How does the 183-day test apply to inbound visitors?

An individual physically present in Australia for 183 or more days during the income year (1 July to 30 June) is an Australian tax resident UNLESS the Commissioner is satisfied that the individual's usual place of abode is outside Australia AND the individual does not intend to take up residence in Australia. Days are counted in aggregate -- they need not be consecutive. The escape condition uses "usual" place of abode rather than "permanent," a lower threshold than the domicile test. This test is most relevant for inbound visitors on extended stays who are not domiciled in Australia. Unlike the proposed bright-line model discussed below, it operates within the current common-law framework and is qualified by the usual-abode and intention exceptions [SC1].

What is the Commonwealth superannuation test?

The Commonwealth superannuation test deems an individual an Australian tax resident if they are a contributing member of the Commonwealth Superannuation Scheme (CSS) or Public Sector Superannuation Scheme (PSS) under the Superannuation Act 1976, or are the spouse or dependent child under 16 of such a member. The test prevents government employees posted overseas from ceasing to be tax residents. Its scope is narrow and declining: the CSS closed to new entrants in 1990 and the PSS closed in 2005, replaced by the Public Sector Superannuation Accumulation Plan (PSSAP), which is NOT caught by this test. As of 2026 only a shrinking cohort of long-tenured legacy-scheme members remains within its scope [SC1].

What is the proposed bright-line residency model and is it law?

The proposed statutory bright-line residency model is NOT yet legislated and does not currently apply. The four-test common-law framework under s6(1) ITAA 1936 remains operative as of 8 June 2026. The proposal originated in the 2021-22 Federal Budget and was subject to a Treasury consultation (July 2023, closing September 2023). The proposed primary test would deem an individual a resident if physically present in Australia for 183 days or more in any income year. Individuals present for 45 to 182 days would face secondary factor tests: two or more of the following connecting factors would result in residency -- Australian citizenship or permanent residency, exclusive Australian accommodation, spouse or dependent children under 18 in Australia, or substantial economic ties. No formal government response has been released and no implementation bill has been tabled. July 2026 was the earliest possible implementation date but has passed without legislation. Until Royal Assent is given to an amending bill, the current four tests apply [SC4].

Feature	Australian tax resident	Foreign/non-resident
Income taxed	Worldwide income	Australian-source income only
Tax-free threshold	Australian dollars 18,200 (2025/26)	None -- taxed from first dollar
Rate on first bracket	0% up to Australian dollars 18,200	30% from Australian dollars 0 to 135,000
Rate on next bracket	16% (Australian dollars 18,201-45,000)	30% (continued to Australian dollars 135,000)
Mid bracket	30% (Australian dollars 45,001-135,000)	37% (Australian dollars 135,001-190,000)
Upper bracket	37% (Australian dollars 135,001-190,000)	45% above Australian dollars 190,000
Top rate	45% above Australian dollars 190,000	45% above Australian dollars 190,000
Medicare Levy	2% on most taxable income	Not applicable to non-residents
Foreign Income Tax Offset	Available for foreign tax paid	Not applicable

For the broader Australian tax context, see the Australia country overview. The residency determination interacts closely with capital gains tax on departure (CGT event I1 under s104-160 ITAA 1997) and with treaty tie-breaker rules under Australia's double-tax agreement network -- both are covered in separate crossovers for this jurisdiction. Both residents and non-residents who receive Australian-source income need a Tax File Number (TFN); without one, payers must withhold at the top withholding rate under the TFN withholding rules rather than applying the lower non-resident withholding rates. Non-residents and individuals living outside Australia can apply using the ATO's NAT 2628 form [SC5].

Residency classification has material tax consequences and the ATO actively challenges the status of individuals with Australian connections who claim non-residency. A registered tax agent or Chartered Accountant with international-tax experience is well placed to assess the facts of any specific situation and confirm the appropriate classification. Nothing on this page constitutes advice.

Expat Tax Residency in Australia

Key points