GM Tax

Quirky Tax Fact: Annualised Tax Free Threshold of A$5m in Australia

Did you know that you receive the tax free threshold for a whole month if you become a tax resident of Australia part way through the month?

Note: The tax free threshold is the amount of taxable income you can receive before you pay income tax in Australia.

Also, that there is a basic amount below which the tax free threshold does not fall.

The tax free threshold for new residents of Australia is computed as follows:

> Basic amount of A$13,464, plus

> A$4,736 x number of months/12

The number of months includes part months – so an arrival to live in Australia on the last day of the month means you secure that month’s increment.

A couple of examples:

1. Arrive in Australia on the 12th of October, 2014.

The tax free threshold for 2014/15 is A$13,464 plus $4,736 x 9/12, equals $17,016.

2. Arrive in Australia on the 30th of June, 2015 (the last day of the 2014/15 tax year in Australia).

The tax free threshold for 2014/15 is A$13,464 plus $4,736 x 1/12, equals $13,858.

A $13,858 tax free threshold for one day of tax residency in Australia is equivalent to an annualised threshold of over A$5m!

If you are moving to Australia and would like a pro forma income tax calculation to be prepared so you know your after tax income with a measure of certainty contact your nearest GM Tax office, or complete the enquiry form on this page.