Australian Tax Returns for New Residents 2026: Refund Guide

Your first Australian tax return explained — residency, worldwide income, the deductions people miss, and how to get your refund

Overview

Your first Australian tax return is one of the more confusing parts of settling in, because almost nothing works the way it does elsewhere: the tax year is not the calendar year, you may have to declare income you earned overseas, and the difference between a small refund and a large one comes down to knowing which deductions you can claim. Get it right and you recover the tax you were over-charged during the year; get it wrong and you either leave money behind or risk a penalty.

This guide walks a new resident through the whole process: how the Australian tax system works, whether you count as a tax resident, when and how to lodge, the crucial question of declaring worldwide income, the deductions most people miss, the Medicare Levy, and how and when your refund arrives. It is written for people arriving in Australia, so it flags the first-year traps, especially for those coming from Hong Kong.

The core idea: tax in Australia is 'pay as you go' during the year, then reconciled once a year when you lodge, and your job at tax time is to declare everything correctly and claim everything you are entitled to.

1. How the Australian Tax System Works

Three fundamentals shape everything else:

• The financial year runs 1 July to 30 June — not the calendar year; tax season opens on 1 July for the year just ended.

• Pay As You Go (PAYG) withholding — your employer withholds tax from each pay and sends it to the Australian Taxation Office (ATO) on your behalf, based on an estimate.

• The annual tax return — after 30 June you lodge a return declaring your income and deductions; the ATO calculates your actual tax, compares it to what was withheld, and either refunds the difference or asks you to pay more.
  

This 'withhold then reconcile' design is why almost everyone lodges a return: the amount withheld during the year is only an estimate, and it rarely matches your actual tax to the dollar. If too much was withheld, which is common, especially with deductions in play, you get a refund; if too little, you have a bill. Either way, the return is the moment the estimate is trued up against reality, and the deductions you claim are the main lever you control in that calculation.

For a new resident, one habit makes this whole system work in your favour: keep every work-related receipt and a simple log of home-office hours and work mileage from your very first week. Because the return is where you reclaim over-withheld tax, and deductions are the main thing you control, the person who documents their expenses through the year almost always ends up better off than the equally-entitled person who did not keep records and cannot substantiate a claim. Good habits from day one quite literally pay you back at tax time.

So a refund is not a gift from the government; it is the return of tax you overpaid through PAYG during the year. How much you get back depends on your income, how much was withheld, and, crucially, the deductions you claim.

A simple illustration shows why deductions matter so much (figures illustrative). Imagine two colleagues each earned A$70,000 and each had, say, A$14,000 withheld through PAYG. One lodges declaring only their salary and gets a modest refund. The other claims A$2,500 of legitimate work-related deductions, working from home, phone, professional fees, self-education, which reduces their taxable income to A$67,500. At a 30% marginal rate, those deductions cut their tax by roughly A$750, so their refund is about A$750 larger, for the same job and salary. The only difference is that one person knew, and documented, what they could claim.

2. Are You an Australian Tax Resident?

This is the first and most important question for a new arrival, because it changes your tax rates and what income you must declare, and it is not the same as your visa status.

2.1 Resident vs non-resident for tax

• Tax residents get the tax-free threshold (around A$18,200), are taxed at resident (lower, progressive) rates, and must declare their worldwide income.

• Non-residents for tax get no tax-free threshold, are taxed from the first dollar at higher non-resident rates, but only on Australian-sourced income, and generally do not pay the Medicare Levy.
  

Residency for tax is decided by your circumstances, how and where you live, your ties and intentions, not simply by which visa you hold. Most people who move to Australia to live and work become tax residents, but the determination can be nuanced, so if you are unsure, confirm it with the ATO or an accountant.

Broadly, the ATO looks at whether you actually reside in Australia, factoring in things like where you live, your family and social ties, your employment, and your intention to stay. There are additional tests (for example based on your domicile, or on spending more than half the year here), but for most people who move to Australia to settle, the everyday reality of living here makes them a tax resident from the point they arrive to live. The takeaway is not to memorise the tests, but to recognise that genuinely relocating to Australia usually makes you a resident for tax, with all that implies for worldwide income.

2.2 The part-year resident (your first return)

In the year you arrive, you are usually a resident for only part of the year, which makes you a part-year resident. Your tax-free threshold is then pro-rated rather than the full amount, and only the income from when you became a resident is taxed as a resident. This is a common source of confusion and small surprises on a first return, so expect your first year to look a little different from later years.

A quick example makes the part-year point concrete. If you arrived and became a resident partway through the year, you do not get the full tax-free threshold; it is scaled to the months you were a resident, plus a base amount. In practice this means your first-year return may tax slightly more of your Australian income than a full-year resident would expect, which occasionally surprises new arrivals who assumed the whole threshold applied. It evens out from your first full year onward, so it is a one-off feature of the arrival year rather than an ongoing disadvantage.

3. When and How to Lodge

3.1 Deadlines

• Lodging yourself — the deadline is generally 31 October after the 30 June year-end.

• Through a registered tax agent — you can usually lodge later (often into the following year), but you must be on the agent's books before 31 October.

• Late lodgement — can attract a failure-to-lodge penalty and interest, so do not simply ignore it.
  

3.2 How to lodge

You have two main routes. Yourself, online — through a myGov account linked to the ATO, using myTax; this is free and fine for straightforward affairs. Through a registered tax agent — worthwhile if your situation is complex (foreign income, investments, a business, or many deductions), because a good agent typically recovers more than their fee, and the fee is deductible next year. Only agents registered with the Tax Practitioners Board may charge to prepare your return.

4. What You Need Before You Start

Gather these before you begin:

• A Tax File Number (TFN) — apply for one soon after arriving; without a TFN you are taxed at the top rate, so this is a priority.

• A myGov account linked to the ATO — your gateway to lodging online and seeing pre-filled data.

• Your Income Statement — your employer reports your pay and withholding through Single Touch Payroll; wait until it shows as 'tax ready' in the ATO (usually mid-July) before lodging.

• Records of other income — bank interest, dividends, rent, and any foreign income.

• Records for deductions — receipts, a work-from-home hours log, vehicle mileage, and so on (Section 6).
  

The ATO pre-fills much of your return from employer and bank data, but pre-fill is not always complete or correct, and it will not add your deductions for you, so you must review, correct and complete it yourself.

A few first-year surprises are worth pre-empting. Bank interest is taxable and is pre-filled, so do not forget it exists; if you did not give your bank your TFN, the bank may have withheld tax you can reclaim on your return. Any second job is taxed differently because the tax-free threshold is usually only applied to one job, so people with two jobs sometimes owe a little at year end rather than getting a refund. And if you were paid as a contractor with an ABN rather than as an employee, no tax was withheld for you, so you may have a bill instead of a refund. Knowing these in advance prevents an unwelcome shock on your first return.

5. Declaring Worldwide Income (the new-resident trap)

This is the point most new residents get wrong, and it can be serious. As an Australian tax resident, you generally must declare your worldwide income on your Australian return, not just what you earned in Australia. That includes salary, rental income, interest, dividends and other income from overseas, including from Hong Kong.

Two things soften this. First, a Foreign Income Tax Offset may be available for foreign tax you have already paid on that income, to reduce or avoid double taxation. Second, only income earned while you are a tax resident is caught, so income from before you became a resident is generally not included. The rules on foreign income, offsets and any interaction with the tax system of your former home can be complex, so a new resident with overseas income or assets should get advice before the first return, rather than assume foreign income can simply be left off.

The risk of ignoring this is real: the ATO exchanges financial information with many jurisdictions, so undeclared foreign income is increasingly likely to surface, with penalties attached. When in doubt, declare and seek advice.

It is worth understanding the Foreign Income Tax Offset a little more, because it is what prevents most double taxation. If you paid tax overseas on income that Australia also taxes, the offset generally reduces your Australian tax by up to the amount of foreign tax paid, so you are not taxed twice on the same income. The mechanics, and how they interact with the tax rules of your former home, can be intricate, and the position for income from Hong Kong specifically is something to confirm with an accountant rather than assume. The safe approach for a new resident is always to disclose the foreign income and let a professional apply the correct offset, rather than omit it and hope.

A practical sequencing tip for anyone with overseas income in their arrival year: work out the exact date you became a tax resident, because that date draws the line between foreign income that is caught and foreign income that is not. Income you earned overseas before that date is generally outside the Australian net, while income from that date onward is declarable. Getting that date and the split right is one of the main reasons a first-year return with foreign income is worth handing to a professional.

6. Deductions You Can Claim

Deductions are where a modest refund becomes a good one. The ATO lets you deduct work-related expenses that you paid yourself, that relate directly to earning your income, and that you can substantiate. The most commonly claimed, and most commonly missed, include:

• Working from home — a portion of running costs, via a fixed hourly rate or the actual-cost method; keep a log of hours.

• Phone and internet — the work-related percentage of your bills.

• Tools and equipment — items under a small threshold are deductible immediately; more expensive items are depreciated.

• Work-related travel — between work sites (not your normal home-to-work commute); keep mileage records.

• Uniforms and laundry — specific work uniforms and protective clothing (not ordinary clothes).

• Self-education — courses directly related to your current job (not for changing careers).

• Union and professional fees, professional memberships and licences.

• Income protection insurance premiums you pay yourself.

• Donations to registered charities, and last year's tax agent fee.
  

Three rules govern all of them: you paid it yourself, it relates to earning your income, and you have a record. What you cannot claim includes your normal commute, everyday clothing, private meals and purely personal expenses. Two people on the same salary can end up with very different refunds purely because one claimed their entitlements and the other did not.

6.1 Two methods worth knowing: home office and car

Two of the biggest deductions each offer a choice of method. For working from home, you can use a fixed hourly rate that bundles running costs together (simpler, but you must log your hours), or the actual-cost method that itemises the work-related portion of each expense (potentially larger, but more record-keeping). For a car used for work (again, not the ordinary commute), you can use a cents-per-kilometre method up to a capped distance (no fuel receipts needed, but you must reasonably estimate work kilometres), or a logbook method that captures your work-use percentage of actual running costs (best for high work mileage). The ATO app can track both hours and kilometres, which makes claiming far easier at year end.

7. The Medicare Levy

Most tax residents pay the Medicare Levy, an extra 2% of taxable income, to help fund the public health system, with reductions or exemptions for low-income earners. There is an important angle for new arrivals: if you are not yet eligible for Medicare (for example, on a temporary visa with no reciprocal agreement, as is the case for people from Hong Kong), you may be able to claim a Medicare Levy exemption for that period, since you cannot use the system.

Claiming the exemption requires a Medicare Entitlement Statement as evidence, so if you were not eligible for Medicare during the year, factor this into your return, it can be a meaningful saving, and confirm the details with your accountant.

Beyond deductions, be aware of tax offsets (also called rebates), which reduce your tax directly rather than your taxable income. The most relevant for many is the low-income tax offset, which automatically reduces tax for lower earners, and there are others for specific circumstances. You generally do not claim these manually, the ATO applies eligible offsets when it assesses your return, but knowing they exist explains why your final tax can be lower than a simple rate calculation suggests. Deductions and offsets work differently (one lowers income, the other lowers tax), and together they shape your final refund.

8. Getting Your Refund

Once you lodge, the ATO processes the return and, if you are owed money, pays the refund into your nominated bank account, typically within two to four weeks for an online return (occasionally longer if the ATO reviews something). To avoid delays: make sure your bank details in the ATO are correct, wait until your Income Statement is 'tax ready' before lodging, and declare everything accurately so the return is not held up for checks.

Remember that the size of your refund is set by your income, your withholding and your deductions, not by how early or late you lodge. Lodging early simply means being paid sooner; it does not increase the refund, and lodging late only risks penalties.

If you end up owing tax rather than receiving a refund, do not panic; the ATO issues a notice with a due date, and payment plans are available if needed. For new residents this most often happens with a second job, contractor income, or investment income where not enough was withheld during the year. The fix for future years is usually to adjust your withholding or set money aside, so that the annual reconciliation does not produce a surprise bill.

9. Special Situations for New Residents

A few situations are specific to your first years in Australia:

• Part-year threshold — your first-year tax-free threshold is pro-rated, so your first refund may differ from what you expect.

• Foreign income and assets — as a resident you declare worldwide income, with possible offsets for foreign tax paid; get advice if you have overseas income or assets.

• No TFN yet — until you provide a TFN you are taxed at the top rate, so applying early avoids over-withholding.

• Medicare Levy exemption — available for periods you were not eligible for Medicare, with the right statement.

• Leaving Australia — if you depart partway through a year or permanently, there are specific rules; check them before you go.
  

On departure there is one more thing worth knowing: your superannuation. If you leave Australia permanently as a temporary resident, you may be able to claim your super back through a Departing Australia Superannuation Payment, though it is taxed. Permanent residents and citizens generally cannot, and keep their super for retirement. This is separate from your income tax return but part of the same 'leaving Australia' picture, so factor it in if a departure is on the horizon.

The overarching theme is that your first return is the most complex one you will file, because residency, part-year status and foreign income all converge. It is often worth using a tax agent for that first year, then switching to self-lodging once your affairs are settled and you understand the pattern.

10. After You Lodge: Reviews, Amendments and Records

Lodging is not quite the end of the story:

• Reviews and audits — the ATO may ask you to substantiate deductions (work travel, home office and laundry are common targets); provide your records calmly, and unsupported claims can be denied with tax and interest to pay.

• Amendments — if you later find you left out income or a deduction, you can generally amend your return within about two years to fix it.

• Keep your records — hold onto receipts, logs and statements for the required period (generally several years), since a claim is only as strong as the evidence behind it.

• Use the ATO app — recording deductions and mileage through the year turns a stressful June scramble into a simple import.
  

None of this is cause for anxiety; it is routine. The people who find tax time painful are almost always the ones with no records, while those who track expenses through the year find both lodging and any review straightforward.

11. Common Mistakes to Avoid

• Not declaring foreign income — as a resident you generally must, and the ATO increasingly finds undeclared amounts.

• Assuming visa status equals tax residency — they are decided differently and have very different consequences.

• Lodging before the Income Statement is 'tax ready' — leading to errors and possible amendments.

• Missing deductions — the biggest avoidable loss on most returns.

• No TFN — being taxed at the top rate until you provide one.

• Keeping no records — deductions without substantiation can be denied on review.
  

12. Three Scenarios

12.1 The salaried professional in their first year

You arrived partway through the year and have one job. Wait for your Income Statement to be 'tax ready', lodge via myTax, and remember your tax-free threshold is pro-rated for the part-year. Claim your work-from-home, phone, professional fees and other entitlements, and, if you were not yet Medicare-eligible, look into the levy exemption. A first-year return like this is manageable yourself, though many use an agent once.

12.2 The new resident with Hong Kong income

You became a tax resident during the year but still received income from Hong Kong. As a resident you generally must declare that worldwide income, with a possible offset for foreign tax paid. This is exactly the situation to take to a registered tax agent for your first return, to get the residency timing, the foreign income and any offsets right.

12.3 The investor

You have rental income, or bought and sold shares. You must declare the rental income and any capital gains, and you can claim property deductions and depreciation. This adds real complexity, so a tax agent who knows property and investments will usually more than pay for themselves.

12.4 The two-job or contractor arrival

You took a second job, or some contractor work with an ABN, to get established. Because the tax-free threshold is usually applied to only one job, and because no tax is withheld on ABN income, you may find you owe tax rather than receiving a refund. This is not a mistake, just how the withholding worked out; the fix is to set money aside or adjust your withholding for next year, and it is another case where a quick chat with a tax agent in year one saves surprises.

13. FAQ

Q1. When is the Australian tax year and lodgement deadline?

The tax year runs 1 July to 30 June, and if you lodge yourself the deadline is generally 31 October, while a registered tax agent can lodge later if you register before then.

Q2. Am I an Australian tax resident?

It depends on your circumstances, not your visa; most people who move to Australia to live and work become tax residents, gaining the tax-free threshold but having to declare worldwide income.

Q3. Do I have to declare my Hong Kong income?

As an Australian tax resident, generally yes, you must declare worldwide income, though a Foreign Income Tax Offset may apply for foreign tax already paid, so get advice.

Q4. How do I lodge my return?

Online yourself through myGov linked to the ATO using myTax, or through a registered tax agent if your situation is complex, which often recovers more than the fee.

Q5. What deductions can I claim?

Work-related expenses you paid yourself and can substantiate, such as working from home, phone and internet, tools, work travel, uniforms, self-education and professional fees.

Q6. Why is my first-year refund different?

Because as a part-year resident your tax-free threshold is pro-rated, so your first return often looks different from later full-year returns.

Q7. Do I need a Tax File Number?

Yes, and apply early, because without a TFN you are taxed at the top rate until you provide one.

Q8. When will I get my refund?

Usually two to four weeks after lodging online, provided your details are correct and the return is not selected for review; lodging earlier only means being paid sooner.

Q9. What if the ATO asks me to prove a deduction?

Provide your receipts, logs or statements; the process is routine, but deductions you cannot substantiate can be denied with tax and interest added, so keep good records.

Q10. Can I fix a mistake after lodging?

Yes, you can generally amend your return within about two years to add missed income or deductions or correct an error.

Q11. Should I use a tax agent for my first return?

Often yes, because the first year combines residency, part-year status and possibly foreign income, and a registered agent usually recovers more than their fee, which is itself deductible next year.

14. New Resident Tax Checklist

Before you lodge your first return:

• Applied for a TFN and linked myGov to the ATO.

• Confirmed your residency status for tax (and part-year position).

• Waited for your Income Statement to show as 'tax ready'.

• Gathered all income — Australian and foreign.

• Declared worldwide income if a resident, with offsets for foreign tax paid.

• Collected deduction records — WFH hours, mileage, receipts.

• Checked the Medicare Levy exemption if you were not Medicare-eligible.

• Considered a tax agent for your first, most complex year.
  

Conclusion: Get the first one right, and the rest are easy

Your first Australian tax return carries the steepest learning curve, because residency, part-year status, worldwide income and unfamiliar deductions all land at once. But the principles are simple: work out whether you are a tax resident, declare all your income honestly (including from overseas), claim every deduction you are entitled to, and lodge on time.

Apply for your TFN early, wait for your Income Statement, declare worldwide income, claim your deductions, check the Medicare Levy position, and use a tax agent for the first year if in any doubt. Do that, and you will recover the tax you are owed, avoid the penalties that catch the unwary, and turn what feels like a daunting first return into a routine annual task.

It also pays to treat your first return as a chance to set good habits: apply for your TFN and give it to your employer and bank, start logging work expenses and mileage in the ATO app from day one, keep your Income Statement and any foreign-income records together, and diarise the 31 October deadline. With those habits in place, each subsequent return takes a fraction of the effort, and you capture every deduction without the year-end scramble. The first return is the hard one precisely because everything is new; once you have done it, the Australian system is genuinely straightforward.

Finally, keep the bigger picture in view: for most new residents, filing correctly is not just about this year refund but about building a clean tax record in your new country. A consistent history of lodging on time, declaring worldwide income and claiming only what you can substantiate is exactly what smooths future dealings, from finance applications to any interaction with the ATO. In that sense the effort you put into your first return is an investment in an easier financial life in Australia, not just a one-off chore.

A final note: tax residency, rates, thresholds, deduction rules and foreign-income treatment are technical and change over time; this is general information only, not personal tax advice. For your first return, and especially if you have foreign income or investments, consult a registered tax agent for your circumstances.