Foreign Resident Tax Rates
Tax rates for individuals who are not Australian residents for tax purposes — no tax-free threshold and different brackets.
If you are classified as a foreign resident for tax purposes (non-resident), you are taxed only on your Australian-sourced income but at different rates and without the tax-free threshold. For 2026-27, foreign residents pay 30% on income from $0 to $135,000, 37% from $135,001 to $190,000, and 45% above $190,000. There is no Medicare levy for foreign residents, but also no access to LITO or other resident-only offsets.
Your tax residency status is determined by factors including your domicile, the 183-day test, your ties to Australia (family, business, assets), and your intention to reside. It is possible to be a tax resident of both Australia and another country simultaneously, in which case double tax agreements (DTAs) may provide relief from being taxed twice on the same income.
Foreign residents are not entitled to the 50% CGT discount for capital gains on assets acquired after 8 May 2012, and CGT withholding of 15% applies to property disposals by foreign residents, with no minimum property value threshold (the former $750,000 threshold was removed from 1 January 2025). Foreign residents also cannot access the main residence CGT exemption unless specific conditions are met. From 1 July 2027, the general 50% CGT discount is abolished for Australian residents too, so for disposals from that date this is no longer a resident-versus-foreign-resident difference.
How it works
If you're classified as a foreign resident for Australian tax purposes, you're taxed only on your Australian-sourced income, but under a different rate structure to residents. For 2026-27, foreign residents pay 30% on income from $0 to $135,000, 37% from $135,001 to $190,000, and 45% above $190,000 — with no tax-free threshold at all, so tax applies from the very first dollar.
Your residency status turns on factors like your domicile, the 183-day test, and your ongoing ties to Australia, such as family, business interests, and assets, rather than simply your citizenship or visa type. In practice, a foreign resident is also excluded from the Medicare levy and from resident-only offsets like LITO, and any Australian property they sell is subject to CGT withholding at 15%, with no minimum property value threshold since the exemption that used to apply below $750,000 was removed from 1 January 2025.
A common trap is assuming residency for tax purposes matches your visa or immigration status — it doesn't; someone can be a tax resident of Australia and another country simultaneously, in which case a double tax agreement may prevent the same income being taxed twice. Foreign residents also generally can't access the 50% CGT discount on assets acquired after 8 May 2012, nor the main residence CGT exemption except in narrow circumstances, both of which materially change the tax outcome of selling an Australian asset. From 1 July 2027 the general 50% discount is abolished for Australian residents as well, so from that date it is no longer a residency difference at all.
Example: tax on Australian-sourced salary as a foreign resident
A foreign resident earns $100,000 in Australian-sourced salary during 2026-27. Because there's no tax-free threshold for foreign residents, the entire $100,000 falls within the 30% bracket, which applies from $0 to $135,000, giving income tax of $100,000 times 30%, which is $30,000.
That's a materially higher outcome than an Australian resident would face on the same $100,000, since a resident's first $18,200 is entirely tax-free and the next tranche is taxed at only 15%. No Medicare levy applies to the foreign resident's $30,000 figure either, since foreign residents sit outside the Medicare levy system entirely.
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Tax Brackets
The income ranges that determine the rate of tax applied to each portion of your taxable income.
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.
Tax-Free Threshold
The first $18,200 of annual income that is not subject to income tax for Australian residents.
Capital Gains Tax (CGT)
Tax on the profit made from selling or disposing of an asset, such as property, shares, or cryptocurrency.
CGT Withholding (Foreign Residents)
A 15% withholding from the sale price when a foreign resident sells Australian property, with no minimum value threshold since 1 January 2025.