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Taxes in Australia for newcomers

How income tax works in Australia: the 1 July to 30 June financial year, PAYG withholding, the 2026–27 resident tax rates, the Medicare levy and surcharge, working holiday maker and foreign resident rates, and how to lodge your tax return with myTax by 31 October.

Checked 8 Oct 2026
Applies to
Everyone who earns income in Australia, including employees on temporary visas. Whether you are a resident or foreign resident for tax purposes affects your rates; the ATO has guidance on working out your tax residency.
Effort
Medium effort
Time needed
Usually 1 to 2 hours a year to lodge a simple return online
Cost
Lodging with myTax is free; registered tax agents charge a fee
When
The financial year runs from 1 July to 30 June; lodge your own return between 1 July and 31 October
On this page
  1. Overview
  2. Before you start
  3. Documents you need
  4. Step by step
  5. Resident tax rates 2026–27
  6. Foreign residents and working holiday makers
  7. The Medicare levy and surcharge
  8. Getting help
  9. Watch out
  10. Common mistakes
  11. Tips
  12. Frequently asked questions
  13. Official links
  14. In your plan
  15. Sources
  16. Related guides

Australia taxes income through the Australian Taxation Office (ATO). The financial (income) year runs from 1 July to 30 June. Employers withhold tax from each pay under pay as you go (PAYG) withholding, and after the year ends most people who earned income and had tax withheld lodge a tax return. The ATO then issues a notice of assessment, which results in a refund if too much was withheld or a bill if too little was.

Your tax rates depend on whether you are an Australian resident for tax purposes, a foreign resident or a working holiday maker. If you are unsure which applies to you, use the ATO's tax residency guidance or ask a registered tax agent.

Before you start

  • A tax file number (TFN)
  • A myGov account linked to the ATO

Documents you need

  • Tax file number

    required

  • Australian bank account details (BSB and account number) for your refund

    required

Step by step

  1. Step 1: Link myGov to the ATO

    Create a myGov account and link it to the ATO. When you lodge online with myTax, the ATO pre-fills most of your information, so you are less likely to leave something out.

  2. Step 2: Wait until your income statement is "tax ready"

    After 30 June, wait until each employer has marked your income statement as tax ready. Collect receipts for any deductions you claim, your private health insurance statement (if you have cover) and, if you need one, your Medicare Entitlement Statement.

  3. Step 3: Lodge with myTax by 31 October

    Lodge your own return between 1 July and 31 October. If 31 October falls on a weekend, the deadline moves to the next business day: in 2026, 31 October is a Saturday. If you will use a registered tax agent, engage them before 31 October.

  4. Step 4: Receive your notice of assessment

    Most online returns are processed within 2 weeks; paper returns can take up to 50 business days. If you lodge your own return by 31 October and owe tax, payment is due by 21 November. If you cannot pay on time, contact the ATO about a payment plan.

  5. Step 5: Leaving Australia

    If you leave permanently during the year, check the ATO's guidance on lodging before you leave or from overseas, and consider claiming your super as a departing Australia superannuation payment. See Superannuation in Australia.

Resident tax rates 2026–27

For Australian residents for tax purposes, the ATO's rates for the 2026–27 income year are:

  • $0 to $18,200: nil (the tax-free threshold)
  • $18,201 to $45,000: 15c for each $1 over $18,200
  • $45,001 to $135,000: $4,020 plus 30c for each $1 over $45,000
  • $135,001 to $190,000: $31,020 plus 37c for each $1 over $135,000
  • $190,001 and over: $51,370 plus 45c for each $1 over $190,000

These rates do not include the Medicare levy of 2%. For the 2025–26 year (the return you lodge in 2026) the second bracket was 16c rather than 15c.

Foreign residents and working holiday makers

  • Foreign residents do not get the tax-free threshold. For 2025–26 the ATO lists 30c for each $1 up to $135,000, then 37c up to $190,000 and 45c above that.
  • Working holiday makers (subclasses 417 and 462) pay 15% on the first $45,000 of working holiday maker income (2025–26 rates), then the same 30%, 37% and 45% steps. Residents from some countries covered by a tax treaty non-discrimination article are treated differently; the ATO explains this on its working holiday maker pages.

The Medicare levy and surcharge

  • The Medicare levy is 2% of your taxable income, worked out when you lodge. Your employer's withholding usually includes an amount for it. Some people get a reduction or exemption.
  • If you were not entitled to Medicare because you were a temporary resident, you may be able to claim a full exemption, but only with a Medicare Entitlement Statement (MES) from Services Australia, and only if all your dependants (including your spouse) were also in an exemption category. MES applications open on 1 July, can take up to 8 weeks, and you must wait for the statement before lodging.
  • The Medicare levy surcharge (1% to 1.5%) applies if your income for surcharge purposes is above $105,000 (single) or $210,000 (family) in 2026–27 and you do not have an appropriate level of private patient hospital cover.

Getting help

  • The ATO's free Tax Help programme helps eligible people with simple tax affairs.
  • Only registered tax agents can charge a fee to prepare your return. Agents have their own lodgment schedules, so you can lodge later than 31 October if you engage one before that date.
  • ATO individual enquiries: 13 28 61 (8am to 6pm, Monday to Friday).

Watch out

Scamwatch warns that scammers pretend to be trusted organisations and threaten arrest or deportation unless you pay immediately. Hang up and call the ATO on its official number.

Keep receipts or statements for every deduction you claim.

Common mistakes

  • Missing the 31 October deadline when lodging your own return.
  • Lodging before your income statements are tax ready.
  • Lodging without a Medicare Entitlement Statement when you claim a Medicare levy exemption as a temporary resident.

Tips

  • Without a TFN you cannot lodge online, and employers and banks must withhold more tax.
  • Australia also has a 10% Goods and Services Tax (GST) included in most prices.

Frequently asked questions

Editorial answers written by our team, based on the sources below.

Do I need to lodge a tax return if I only worked for a few months?

Most individuals who earn income and had tax withheld need to lodge. If you do not need to lodge, the ATO asks you to lodge a non-lodgment advice instead. Use the ATO's guidance to work out whether you need to lodge.

When is my first tax return due?

After the first 30 June following your arrival. For example, if you started work in October 2026, your first return covers 1 July 2026 to 30 June 2027 and is due by 31 October 2027 if you lodge it yourself (the next business day if that date falls on a weekend).

In your plan

  • Lodge your tax return by 31 October
  • Get a Medicare Entitlement Statement before your tax return
  • Apply for your tax file number
  • Estimate your Sydney budget, including move-in costs
  • Create a myGov account and link the ATO
  • Know how to claim your super if you leave Australia

Sources

Written and checked by HomiStart editorial against the official sources below. Next scheduled check: 5 Feb 2027.

  1. Australian Taxation OfficeOfficial source
    Tax rates – Australian residents (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

    Read via the Internet Archive snapshot of 5 October 2026 because the live site blocks automated access.

  2. Australian Taxation OfficeOfficial source
    Tax rates – foreign residents (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

    Snapshot of 26 September 2026 lists rates up to 2025–26.

  3. Australian Taxation OfficeOfficial source
    Tax rates – working holiday makers (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

    Last updated 1 June 2026; lists rates up to 2025–26. Read via the Internet Archive snapshot of 3 June 2026.

  4. Australian Taxation OfficeOfficial source
    Preparing your tax return (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

    Last updated 27 April 2026; read via the Internet Archive snapshot of 3 October 2026.

  5. Australian Taxation OfficeOfficial source
    Lodge your first tax return (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

    Read via the Internet Archive snapshot of 16 June 2026.

  6. Australian Taxation OfficeOfficial source
    What is the Medicare levy? (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026
  7. Australian Taxation OfficeOfficial source
    Not entitled to Medicare benefits (Medicare levy exemption) (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

    Read via the Internet Archive snapshot of 5 March 2026.

  8. Australian Taxation OfficeOfficial source
    Medicare levy surcharge income, thresholds and rates (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026
  9. Australian Taxation OfficeOfficial source
    What is a tax file number? (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026
  10. Australian Taxation OfficeOfficial source
    Contact us (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026
  11. Tourism Australia
    Useful tips (currency and shopping) (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

    Source for the 10% GST.

  12. Scamwatch (National Anti-Scam Centre, ACCC)Official source
    Threat scams (Opens {{site}} in a new tab)
    Accessed 8 Oct 2026

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