US Expats in Australia
Explore the tax obligations that US citizens or Green Card holders must fulfill while living in Australia. Get expert insights on US expat taxes in Australia to understand your filing requirements and optimize your tax strategy.
Published on September 20, 2018
Updated on March 26, 2025
Written by: Johenzon Febb Borje
Meet our specialist accountants for US expats in Australia
Andrew Landin
Tax Lawyer
Founder & CEO
22 years Experience
30-minutes US$497.
Seth Hertz
Enrolled Agent
Tax Director
34 years of Expat Tax Experience
30-minutes US$437.
Nick Wee
Enrolled Agent
Tax Director
18 years of Expat Tax Experience
30-minutes US$437.
Jonathan Rose
Senior Tax Manager
18 years of Expat Tax Experience
30-minutes US$347.
Johenzon Febb Borje
Senior Tax Manager
11 years of Expat Tax Experience
30-minutes US$347.
Depending on the chosen tax contact, the price may increase.
American expat taxes in Australia overview
US Expats in Australia
Living in Australia can make your tax filing requirements quite complicated. To ensure you pay the absolute minimum, it’s critical that your accountant understands every aspect and avenue to deliver the lowest tax liability possible.
How does the Australian/US tax treaty benefit taxpayers?
- Eliminating double taxation: It provides mechanisms to allocate taxing rights between the two countries, ensuring that income is taxed efficiently.
- Saving clause: The treaty allows the US to tax its citizens as if the treaty did not exist, which means US domestic tax laws still apply.
- Totalization agreement: This aspect of the treaty helps avoid dual social security taxation, ensuring that self-employed individuals do not pay into both US Social Security and Australian superannuation systems.
What challenges do US expats face with Australian superannuation?
The primary challenge for US expats in Australia regarding superannuation is the IRS’s classification of these funds.
Unlike the 401(k) or similar US-qualified retirement plans, superannuations do not have a direct counterpart in US law, which complicates how they are treated for tax purposes. This can affect:
- The taxability of employer contributions which may be seen as taxable income by the IRS.
- Reporting requirements on FBAR and Form 8938, depending on the total value of your foreign financial assets.
- Potential complex tax requirements if employee contributions exceed those made by the employer.
Read the full blog about superannuation.
Who needs to file a tax return in Australia?
Australian residents, alongside US expats or Green Card holders must lodge a tax return if they earn Australian-sourced income above the tax-free threshold of $18,200 for 2025.
What are the different types of taxes in Australia?
Common taxes US expats encounter in Australia include:
- Income tax: deducted from wages through Pay-As-You-Go (PAYG) Withholding.
- Capital gains tax: A 50% discount applies to assets over 12 months.
- Goods and services tax (GST): 10% tax on most goods and services sold in Australia.
- Superannuation tax: 15-30% tax on superannuation or retirement funds.
Do I need to report my Australian bank accounts to the IRS?
If the total balance of all foreign accounts exceeds US$10,000 at any time during the year, US expats in Australia need to report their foreign bank account/s. This includes:
- FBAR (FinCEN Form 114) – Due April 15 (automatic extension to October 15).
- FATCA (Form 8938) – If foreign assets exceed US$ 200,000 (for single filers) or US$300,000 at any time, US citizens or Green Card holders must report it on their US tax return.
Do US expats in Australia pay state taxes?
It is possible to still retain the responsibility of paying state taxes while living in Australia. Some US states like California, Virginia, New Mexico, and South Carolina do not recognize residency and may still require a tax return.
What if I haven’t filed US taxes in years?
The IRS Streamlined Foreign Offshore Procedure allows US expats in Australia to catch up on 3 years of returns and 6 years of FBARs without penalties if they weren’t aware of their tax obligations.
Can I claim the Child Tax Credit (CTC) if I have children in Australia?
Yes, US citizens in Australia may claim up to US$1,600 per child. Be sure that the child has a Social Security Number and meets US residency requirements.
Financial considerations for US expats
Moving to Australia as a US expat comes with several financial considerations. Here are some factors to keep in mind:
- Australian healthcare: Generally, permanent residents are qualified for Medicare or Australia’s healthcare. Medicare covers access to medical services and insurance options.
- Financial planning: US citizens can benefit from tax planning that revolves around the structure of Australian taxes such as the Pay-As-You-Go (PAYG).
- Retirement accounts (Superannuation): US expats can open a superannuation account or retirement fund, to which Australian employers are legally required to contribute 11% of an employee’s salary. However, super contributions are not tax-deductible in the US.
- Estate planning: Australia has no inheritance tax, and life insurance is not taxed when paid to dependents. However, the US may tax foreign life insurance policies, so it’s better to check with an expat tax advisor.
- Living conditions: Another important consideration is how US citizens can plan to maximize their lifestyle, which includes the cost of living, accommodation, cultural adjustments, and expat communities.
- Social and community integration: Discover how social aspects of living in Australia can impact a taxpayer’s finances with events such as connecting with other US expats and participating in community events.
