Reporting Your Foreign Employment Income

If you’ve earned foreign employment income this year, find out how to report it correctly on your tax return.

Are you an Australian resident for tax purposes and work overseas? If yes, you must report all your overseas income in your Australian tax return. This includes both your assessable and exempt income – even if tax has been taken out in the country you earned it.

But let’s start with some basics:

What is foreign employment income?

Foreign employment income is income earned by an Australian resident working overseas as an employee. It includes salary, wages, commissions, bonuses and allowances and may be paid by an overseas or an Australian employer.

Am I exempt from paying tax on foreign income?

There are a few exceptions where income you earned overseas may be tax exempt or tax free:

• You’re a member of the Australian defence or police force
• You’re involved in overseas aid work

However, the ATO still requires MOST income earned overseas to be reported on your tax return.  It can be difficult to determine if your income falls within the exception areas.  It is always best to contact a top-rated tax agent for advice on what needs to go on your return.

Reporting your income

It’s important to note the amount of foreign employment income you declare on your tax return should be the amount you earned before tax was with withheld. This is called “grossing up” and helps determine your total assessable overseas income.

For example:

Jennifer lived in Canada from 2nd October 2017 to 1st March 2019 and worked for a ski season at a mountain resort. Jennifer earned $12,500 after tax. She also paid $3,500 worth of tax. Jennifer would therefore have foreign employment income to declare of $16,000.

 

If you’re still unsure about how to fill out your online tax return, give us a call on 1300 693 829 or email us at [email protected].