I moved to Australia partway through last year — do I still get the full $18,200 tax-free threshold?

A first Australian tax return tends to get done carefully and quickly at the same time. The income statement is already sitting in myGov, the figures are modest, and somewhere in the background is the number everyone repeats to a newcomer: eighteen thousand two hundred, tax free. Arrive in February, earn $16,000 by the end of June, and the arithmetic looks like it has finished itself.

It hasn't. The $18,200 is the threshold for someone who was an Australian resident for tax purposes for the whole income year, 1 July to 30 June. Arrive partway through it and the threshold arrives partway too — and the return being lodged right now, for 2025–26, is the first one for a great many people who landed in the second half of that year.

Tax residency is not the visa in your passport

The starting point is a distinction that costs people money every October. Residency for tax purposes is worked out under the tax law, using four statutory tests — the resides test, the domicile test, the 183-day test and the Commonwealth superannuation test. None of them asks what visa you hold.

The ATO's general guidance is more readable than the tests themselves. You are generally an Australian resident for tax purposes if you have always lived here, or have come to Australia and live here permanently; if you have been in Australia continuously for six months or more and for most of that time worked in the one job and lived at the same place; if you have been here for more than six months of the year, unless your usual home is overseas and you do not intend to live in Australia; or if you are an overseas student enrolled in a course longer than six months.

Two consequences of that are counterintuitive to most new arrivals. Someone here on a temporary visa — a student, a skilled worker — can be an Australian resident for tax purposes, with the full obligations that carries. And someone who has been granted permanent residency but is still living and working overseas may not be. The immigration answer and the tax answer come from different questions, and it is the tax one that decides which threshold applies.

How the part-year threshold is actually built

If you became an Australian resident for tax purposes during the income year, your tax-free threshold is adjusted, and it has two components. There is a flat amount of $13,464, which everyone in this position gets. Then there is an additional amount of up to $4,736, apportioned according to the number of months you were in Australia during the income year — including the month you arrived.

Worked through: someone who became an Australian resident on 5 January 2026 was a resident for January through June, six of the twelve months of 2025–26. Their tax-free threshold for that year is $13,464 + ($4,736 × 6 ÷ 12), which is $13,464 + $2,368 = $15,832. Income above that is taxed at the ordinary resident rates — for 2025–26 that means 16c in the dollar up to $45,000. The other brackets do not move at all. Only the tax-free step at the bottom shrinks.

On the return this is question A2. You enter the date you became (or stopped being) an Australian resident for tax purposes, and the number of months you were one, counting the month in which it happened — arrive in November and stay, and the answer is 8. The ATO calculates the threshold from those two entries; you are not asked to do the arithmetic yourself, which is precisely why so few people ever see it.

But I only earned a few months of wages

This is the assumption behind most of the surprise, and it fails in the direction you would least expect. The later in the year you arrived, the smaller your threshold, so the less you need to have earned to go past it. The floor is $13,464, not $18,200 — someone who arrived in May has a threshold only a few hundred dollars above that floor. The ATO says it plainly on its own page for newcomers: with a lower tax-free threshold than a full-year resident, you pay more tax on the same income once your taxable income exceeds the adjusted figure.

There is a second half to it that catches people the following year rather than this one. For the part of the year you were a resident, what you declare is worldwide income, not only the Australian wages that pre-fill from myGov — interest on an account back home, rent from a property there, a dividend from a family company. If you are also a temporary resident, most foreign income is treated differently, and that is a question genuinely worth confirming rather than assuming; we have written separately about how the worldwide income rule works and what the ATO already receives through global data sharing.

The months before you arrived are not taxed at 30%

A second worry runs in the opposite direction. Foreign resident rates start at 30c in the very first dollar with no threshold at all, and people who find that table assume the pre-arrival part of their year is sitting in it. It generally is not. Those rates are for an individual who was a foreign resident for tax purposes for the full year. Where you became or ceased to be an Australian resident during the income year, you receive the part-year tax-free threshold and resident tax rates apply to your income.

What does belong to the earlier stretch is narrower than most people assume. A foreign resident declares income earned in Australia: employment income, rental income, Australian pensions and annuities, and capital gains on taxable Australian property. Australian-sourced interest, dividends and royalties are not declared, provided the Australian bank or company paying them has already withheld tax. There is no Medicare levy for that period either — in the return you can claim an exemption from the levy for the number of days in the year you were a foreign resident.

Two things worth sorting out before 31 October

The first is the date itself, and the evidence behind it. 'The day I landed' is often the right answer and sometimes is not — residency begins when the facts the tests look at begin, which for a straightforward move is the move, but for someone who arrived, went back, and returned months later is a question with a real answer rather than an obvious one. Boarding passes, the lease or the purchase contract, an employment start date, school enrolments: those are the records that settle it years later. A date recalled at the kitchen table is not.

The second is withholding, which is where a first-year tax bill usually comes from. You generally claim the tax-free threshold from one payer only, normally the one paying you the most, and tell any other payer to withhold at the 'no tax-free threshold' rate. Two part-time jobs both claiming the threshold is a common arrangement among people who arrived mid-year and took whatever work was going — and it under-withholds against a threshold that had already been cut down.

The dates are worth being exact about. If you lodge your own return it is due by 31 October, and the ATO's rule is that where 31 October falls on a weekend the due date moves to the next business day. In 2026 the 31st is a Saturday, which puts it on Monday 2 November. Using a registered tax agent's later lodgment program requires being on their books before 31 October rather than after it. And if you lodge your own return between 1 July and 31 October and it produces a bill, the payment is due 21 November.

This is general information current as at 15 September 2026, not advice about a particular arrival date or a particular year, and the residency question especially turns on facts that differ from household to household. If last financial year was your first here, the two things worth having in front of you before the return is prepared are the date your residency started and the documents that support it — everything else follows from those. Working out what a part-year return should look like is ordinary work for our individual tax return service, and the income tax calculator on this site will show you what a full year on the same wage comes to at the current rates, once you are past this first one.