AUFree

Australian Tax Residency — 4-Factor Test

The ATO considers you an Australian tax resident if you satisfy any one of four tests. Score yourself below.

Important: If you satisfy any single test, you are an Australian tax resident — taxed on worldwide income but with access to the $18,200 tax-free threshold and 50% CGT discount. Non-residents pay 32.5% from the first dollar.

Test 1: Resides Test (Ordinary Concepts)

Would an ordinary person consider you to be "residing" in Australia? This is the most important test and considers your overall circumstances.

Do you maintain a home in Australia?

Does your family (spouse/children) live in Australia?

Do you have ongoing employment/business ties in Australia?

Do you maintain significant assets (car, furniture, memberships) in AU?

Is your time abroad intended to be temporary (under 2 years)?

Score: 0/5 factors pointing to residence

Test 2: Domicile Test

If your domicile (legal home) is Australia, you are a resident unless your permanent place of abode is overseas.

Were you born in Australia or did you acquire an AU domicile?

Have you established a permanent place of abode overseas?

Do you intend to live overseas indefinitely?

Domicile test: Not assessed

Test 3: 183-Day Test

If present in Australia for 183+ days in the income year, you're a resident unless your usual place of abode is overseas and you don't intend to take up residence.

Were you physically in Australia for 183+ days this financial year?

Is your usual place of abode outside Australia?

183-day test: Not assessed

Test 4: Commonwealth Superannuation Fund Test

Members of a Commonwealth (government) super fund are automatically considered residents.

Are you a member of a Commonwealth superannuation fund (PSS/CSS)?

Super fund test: Not assessed

Answer the questions above

Your residency assessment will appear here once you answer all questions.

What does this mean?
Resident: Taxed on worldwide income. $18,200 tax-free threshold. 50% CGT discount. Medicare levy applies.
Non-resident: Taxed on Australian-source income only. 32.5% from $0. No CGT discount (post-2012 assets). No Medicare levy.

Understanding the Tests

The ATO's four tests are applied in order. If you meet any one test, you're a resident. The "resides" test (ordinary concepts) is the primary test and considers the totality of your circumstances. Key factors include:

Physical presence — how much time you spend in Australia vs abroad
Family ties — where your spouse and dependents live
Accommodation — whether you maintain a home in Australia
Economic ties — employment, bank accounts, investments, property
Social ties — club memberships, vehicle registration, health insurance
Intention — your stated and demonstrated plans about your stay abroad

The ATO published TR 2023/1 (replacing IT 2650) with updated guidance on the resides test. If your situation is borderline, a private ruling from the ATO is recommended.