What tax rate do non-residents pay in Australia 2026?
Non-residents in Australia for the 2026 financial year will likely pay income tax starting at 32.5% for income up to $120,000, with no tax-free threshold. Higher rates apply for income above this amount, as set by the Australian Taxation Office (ATO).
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How it works in practice
Non-Resident Tax Rates in Australia
For the 2026 Australian financial year (1 July 2025 to 30 June 2026), non-residents are subject to specific income tax rates that differ significantly from those for Australian residents. Unlike residents, non-residents do not receive a tax-free threshold, meaning tax is applied from the first dollar of taxable income.
The current non-resident tax rates, effective from 1 July 2024 and expected to continue into 2026 unless new legislation is enacted, are:
- $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
These rates apply to all Australian-sourced income earned by foreign residents. It is crucial to correctly determine your tax residency status, as this dictates the applicable tax rates and entitlements.
Important exceptions
Key Exceptions and Considerations
While the general non-resident tax rates apply, there are notable exceptions. Working holiday makers, for instance, have a different tax rate structure, typically starting at 15% for income up to $45,000. Additionally, certain types of investment income, such as dividends, interest, and royalties, may be subject to specific withholding tax rates, which can be lower than the general income tax rates, particularly if a double tax agreement exists between Australia and the non-resident's country of residence.
Non-residents are generally only taxed on their Australian-sourced income. Capital gains tax rules also apply differently, usually only to "taxable Australian property." It's important to consult the ATO or a tax professional for specific advice, especially concerning international tax treaties that can modify these standard rules.
What you should do now
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Accurately determine your Australian tax residency status for the relevant financial year.
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Familiarise yourself with the specific non-resident income tax rates published by the Australian Taxation Office (ATO).
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Keep thorough records of all Australian-sourced income and any related deductions you might be eligible for.
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If your financial situation is complex or involves international elements, seek professional advice from a qualified tax agent.
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Lodge your Australian tax return as a non-resident by the due date to declare your Australian income.
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