Do you pay tax on money you transfer out of Australia?

One of the most common questions working holiday makers ask before leaving Australia is whether they need to worry about tax on the money they send home. The short answer is that the act of transferring money out of Australia does not itself create a tax obligation, but the income that money came from may have tax consequences.

Is transferring money overseas taxable?

No, the transfer itself is not a taxable event. Sending money from an Australian bank account to a bank account in your home country is a movement of funds, not income. The ATO does not tax you simply because you moved money.

What the ATO cares about is the income you earned in Australia. That income is taxable in the year it was received, regardless of whether you spend it in Australia or send it overseas.

Do you need to report large transfers?

If you carry more than $10,000 AUD in physical cash in or out of Australia, you are required to declare it to the Australian Border Force. This is an anti-money-laundering requirement, not a tax requirement, and does not trigger any tax liability on its own.

What about income tax already paid in Australia?

If tax was withheld from your pay, that tax has already been paid. When you transfer your net savings home, you are transferring money that has already been through the Australian tax system. There is no second layer of tax.

If you overpaid tax during the year, you can reclaim the excess through your tax return. Any refund can be paid into your Australian bank account and then transferred home.

Will you owe tax at home?

That depends on the tax laws of your own country and whether it has a tax treaty with Australia. Many countries have double-tax agreements with Australia that allow you to offset Australian tax already paid against any liability at home. A tax adviser in your home country is the right person to ask.

Practical tip before leaving

Sort out your Australian tax affairs before you transfer everything home and close your account. You need an active Australian bank account to receive your tax refund and your superannuation withdrawal. Close the account too early and you may not be able to receive these payments without significant complications.

Need help?

Leaving Australia and want to get your finances sorted?

We help working holiday makers with tax returns, super withdrawals, and everything else before departure. Talk to us on WhatsApp.