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NicolaJB(Newbie)Newbie
25 Jan 2024

Hello,


We have an employee, originally from overseas, who has Australian residency and was working for us for a year while living in Australia. She has now moved back to her country of origin permanently to be with family, whilst still being employed by us and working remotely for us. We are still paying her normal monthly pay into her Australian bank account, taxing her as normal.


1) Do I still deduct tax as normal from her wages?

2) We are currently paying her wages into her Australian bank account. If she requests that we pay into an overseas account, will that change anything tax-wise?


Thank you.

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219 views
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RileyATO(Community Moderator)Community Moderator
29 Jan 2024

Hi @NicolaJB,


Whether or not you withhold tax and pay super for your employee comes down to their tax residency. We can't work their tax residency out for them, it's self-assessed and can change based on their circumstances. They can review more information, residency tests and our residency tool to help work out what their residency is.


If they're not an Australian resident for tax purposes then you wouldn't need to withhold tax or pay super. What bank account it's paid into doesn't really factor.


We've answered a similar question before if you'd like to check out our reply.

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Most helpful reply

RileyATO(Community Moderator)Community Moderator
29 Jan 2024

Hi @NicolaJB,


Whether or not you withhold tax and pay super for your employee comes down to their tax residency. We can't work their tax residency out for them, it's self-assessed and can change based on their circumstances. They can review more information, residency tests and our residency tool to help work out what their residency is.


If they're not an Australian resident for tax purposes then you wouldn't need to withhold tax or pay super. What bank account it's paid into doesn't really factor.


We've answered a similar question before if you'd like to check out our reply.

Liked by NicolaJB
NicolaJB(Newbie)Newbie
30 Jan 2024

Thank you, Riley, I will pass on this information to our employee.


I'm a bit confused - when I take the Residency Tool calculator on behalf of the employee (to the best of my knowledge, and I will get her to complete it to confirm), it gives the result that she is "not an Australian resident for tax purposes" and goes on to explain that she "will be subject to income tax at foreign resident rates. There is no tax-free threshold.". Whereas my understanding from your reply above was that we wouldn't need to withhold tax or pay super if she is not a resident for tax purposes.


Could you please clarify?

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How do we tax wages paid to Australian citizen who has permanently relocated overseas? | ATO Community