What are the tax implications of working remotely in Australia for a Canadian company?

 Author: RileyATO(Community Moderator)Community Moderator

12 June 2023

Hi @annaliserobyn,

If you’re working in Australia for an overseas employer the first thing to check is your tax residency. This decides how you’re taxed.

If you’re an Australian resident for tax purposes:

• Find out if your employer has to withhold tax in Canada.
• In Australia, you’re taxed on world-wide income. Your employer must withhold tax under PAYG withholding. To stop you paying tax in both countries, there's a double-tax agreement between us and Canada. So you’ll be able to claim a tax offset when you lodge your return.
• Your Canadian employer will also have to pay super.

If you’re a foreign or temporary resident for tax purposes:

• You’ll need to check with the department of home affairs if you’re able to work in Australia.
• You’ll need to work out whether your income is Australian-sourced or foreign-sourced.
• Generally, you don’t need to tell us about income received from outside Australia, unless your tax residency changes.

As for your HECS debt, when you submit a withholding declaration you'll tick the box to say you have a study loan. This tells your employer to withhold a bit extra to cover compulsory repayments.

Hope this made sense!

Edit 22/06/2023: We just published an article all about what remote working means for your tax return you (or anyone else who comes across this post) might find helpful.

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 Author: CADemployer(I'm new)I'm new

9 Jan 2024

Hello!

On the flipside, I am working for a Canadian employer who has an employee moving to Australia. She will be an Australian tax resident.

As the employer, what must we do in order to withhold tax under PAYG withholding? How do we go about paying super?

Thank you!

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Most helpful reply

 Author: WendyATO(Community Support)Community Support

12 Jan 2024

Hi @CADemployer,

Your right there always two sides to every situation.

If the employee is an Australian resident for tax purposes.

As the employer you will need to register for pay as you go withholding. This provides instructions how to best to do this. If you're not eligible for an ABN, you can still register though.

You mention super not sure if you have used our Work out if you have to pay super. If not, this will help you determine whether need to pay super or not.

If you do, check out our page How to pay super page. This provides information how employers can pay super contributions to their employees in Australia.

If the employee wants to know more than our news article What remote working means for your tax return covers it all.

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