Foreign employment income

Australian residents (for tax purposes) pay tax in Australia on employment income from foreign service unless it is exempt from Australian tax. From July 1, 2009, if you are a resident of Australia, the income tax exemption for foreign employment income will only apply to income which is earned as:

• an aid worker employed by a (recognised) non-government organisation (NGO),
• a government aid worker or
• a specified government employee (defence and police force personnel deployed overseas).

For example: Claire is a health worker. She specialises in helping people who have suffered from natural disasters like bushfires, earthquakes or tsunamis.  As part of an international relief operation Claire goes to Haiti with an NGO to assist locals after an earthquake. The income she earns from her foreign service employment is exempt from being taxed in Australia because she is an aid worker employed by a recognised NGO.

If you are employed on an overseas project that the Minister of Trade approves as being in the national interest, your income will also remain exempt.

NOTE: If you're an Australian working overseas for a continuous period of 91 days or more, certain foreign employment income earned is generally exempt from Australian income tax.

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Last reviewed 9/08/2012