sunshinedawn

Wages

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We have been on the tax calculator aus and just have one question to ask. It may be stupid but I'll ask anyway. We're looking to come out on the new 457 visa for a year paid for by my husband's work. When looking at the wage calculator site you get the option to tick resident or non resident. Which do we tick.

Told you it was a stupid question

 

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Not a stupid question, I had a quick read of the requirements and even though I have lived there still not easy to work through it :)

As for your question, I believe you would be classed a resident from how I have understood it.

One thing to consider, if you are only coming for one year. Look at the end of year tax dates, as you may fall into 2 tax years. the 2nd would be classed as non-resident if i have read it right.

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Maybe this

Quote
Home » Personal Taxation » Tax News and Information » Resident or non-resident: What’s the difference?

Resident or non-resident: What’s the difference?

Added August 29, 2012 Tagged with: Residency

Resident for tax

The Tax Office views “residency” in an entirely different way to other Australian governmental agencies that deal with things like immigration, visas and citizenship.

An individual will be an Australian resident for tax purposes if they “reside” in Australia, adopting the ordinary meaning of the term, or satisfy at least one of the three statutory tests. These are:

•    Domicile test. The person’s domicile is in Australia unless the Commissioner of Taxation is satisfied that the person’s permanent place of abode is outside Australia

•    The 183 day test. The person is present in Australia for at least 183 days in an income year, unless the person’s usual place of abode is outside Australia and they do not intend to take up residence in this country

•    Commonwealth superannuation fund test. The person is a contributing member of the fund for Commonwealth government officers.

http://www.lewistaxation.com.au/tax/general-tax/resident-for-tax-purposes

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Generally, on a 457, you are tax resident in Australia.  I assume it is the same on the new versions of the visa.  It will make a huge difference to your take home pay.

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Yes, tax residents use the following scale.  I'm not sure of the non resident tax rates but I thinks it is about 32% from the first dollar.  You should find them on the ato site.  Basically, tax residents pay a lot less tax on the same income as tax non-residents

 

2016-2017

               -        18,000   0%

     18,201     37,000      19%

     37,001     87,000      33%

     87,001   180,000      37%

   180,001   +                 45%

Medicare levy                2.0%

Edited by Collie

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12 hours ago, evets said:

Not a stupid question, I had a quick read of the requirements and even though I have lived there still not easy to work through it :)

As for your question, I believe you would be classed a resident from how I have understood it.

One thing to consider, if you are only coming for one year. Look at the end of year tax dates, as you may fall into 2 tax years. the 2nd would be classed as non-resident if i have read it right.

No you haven't read it right. Would be classed as a (temporary) resident for the part of the year that were in Australia (same as in 1st year where would be classed as non-resident for the part of the year prior to coming to Australia). Note that all the tax literature refers to a person being resident or non-resident but 457 holders fall into a third category - temporary resident. Temporary residents are taxed as residents on their Australian Income but as non-residents on their foreign income. The same used to apply to WHV holders but there's now a whole new category for them.

 

Note that the zero rate allowance is pro-rated for the part of the year you are resident for, while the other thresholds are not. That means if you are only in Australia for 3 months of a tax year (Australian Tax Years end on 30th June) you only get $4,550 tax free but can still earn $18,800 at 19% (based on FY2017 rates). The tax that your employer deducts won't be adjusted for this but it will be reflected in your tax refund at the year end.

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22 hours ago, Ken said:

No you haven't read it right. Would be classed as a (temporary) resident for the part of the year that were in Australia (same as in 1st year where would be classed as non-resident for the part of the year prior to coming to Australia). Note that all the tax literature refers to a person being resident or non-resident but 457 holders fall into a third category - temporary resident. Temporary residents are taxed as residents on their Australian Income but as non-residents on their foreign income. The same used to apply to WHV holders but there's now a whole new category for them.

 

Note that the zero rate allowance is pro-rated for the part of the year you are resident for, while the other thresholds are not. That means if you are only in Australia for 3 months of a tax year (Australian Tax Years end on 30th June) you only get $4,550 tax free but can still earn $18,800 at 19% (based on FY2017 rates). The tax that your employer deducts won't be adjusted for this but it will be reflected in your tax refund at the year end.

Thanks Ken for the clarification, was not aware of this.

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