Australian tax guide for non-resident freelancers

If you’re a non-resident freelancer working in Australia, you may be confused about your tax obligations!

Even the simple tasks of calculating how much tax you need to pay or finding out if you owe money to the Australian Taxation Office (ATO) can be daunting. 

But don’t worry, Taxback is here to answer all of your tax questions and help you to understand your Australian tax obligations

In this article, we will go through everything you need to know about Australian tax as a non-resident freelancer. 

So...let’s get started!

Want to Learn More About Australian Tax?

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Who is considered a freelancer in Australia?

The Australian government considers you to be a freelancer if you: 

• Provide the tools that you use for your work

• Make payments for projects you work on

• Do not receive paid holiday or illness leave

• Control your working hours, where you work and how you work 

You should also keep in mind, if you spend less than 183 days living and working in the same location in Australia, you are deemed a non-resident for tax purposes.

Should I be filing taxes as a non-resident freelancer?

The simple answer is yes! If you earn income and pay tax, you must file your tax return at the end of the tax year. 

The Australian tax year runs from 1 July up until 30 June. The deadline for filing your tax return is 31 October every year.

If you fail to file your tax return you may face penalties or fines from the ATO. 

Filing taxes as a freelancer

The way in which non-resident freelancers in Australia file and pay taxes depends on the manner in which they conduct business. 

Freelancers can choose to operate as sole traders, a partnership or company.  If you freelance as a sole trader or partnership, you’re eligible for the tax-free threshold which is $18,200. 

If you operate as a partnership, you must file your tax return using two tax numbers, your ABN and your Tax File number (TFN).

An ABN is a unique 11-digit number assigned to businesses by the Australian Business Register (ABR). 

You can file your tax return as a non-resident freelancer directly with the ATO. However, why spend your valuable time stressing over tax paperwork?

Taxback can file your Australian tax return on your behalf. We will ensure you are fully tax compliant and receive your maximum legal refund.

Apply for your tax refund today with Taxback!

Goods and Services Tax

If your income as a freelancer exceeds $75,000, you must pay Goods and Services tax. 

Goods and Services Tax is a tax on goods and services in Australia, levied at 10%. 

In order to register to pay GST,  you must have an ABN (Australia Business Number).

You can choose to pay your GST tax on a monthly, quarterly or annual basis. If you overpay in GST, you may be due a tax refund for the ATO. 

Personal Services Income (PSI)

As a freelancer, you may earn PSI. This is income earned through the use of your personal skills and abilities as an individual. It is important to work out if you have earned PSI as it can affect the tax deductions that you can claim for. 

To find out more about PSI, check out our blog on Australian tax and PSI.

Deductible Expenses for non-resident freelancers

As a non-resident freelancer working in Australia, you will be able to claim a tax deduction for some of the expenses you incur. This means that you can reduce the amount of tax you pay… happy days!

 In order for an expense to be eligible for a tax deduction, it must meet the following criteria:

• The expense isn’t used for personal use and is directly related to the running of your business

• You have records to prove that you incurred this expense - there are some allowable receipt-free deductions

• If the expense is used for both business and personal use, you can only claim the amount of the cost that is for business purposes

The following are some of the most popular deductible expenses for non-resident freelancers in Australia. 

Travel & vehicle expenses

If you use a vehicle as part of your work as a freelancer you can claim the following expenses:

• Repairs and servicing expenses

• Lease payments

• Insurance premiums

• Registration costs

• Fuel and oil

• Depreciation

• Interest on a loan for a motor vehicle

Keep in mind that if you use your vehicle for both work and personal purposes, you can only claim a deduction for the portion of your expenses that relates to your usage of the vehicle for business purposes. 

You should record your usage of the vehicle for business purposes so that you know what portion of your expenses you can claim a deduction for. 

You may also claim for expenses you incur if you travel for work purposes, these expenses include:

• Accommodation

• Airplane fares

• Public transport/Taxi fares

• Meals, if you stay overnight

• Car hire cost

Leveraging these deductible expenses allows you to manage your business travel costs efficiently while maximizing your tax benefits.

Repair and maintenance expenses

You can claim a tax deduction for a number of business-related repairs and maintenance expenses. The following repairs are eligible for a tax deduction: 

• Painting

• Plumbing

• Electrical Appliances

• Computer/IT equipment

• Machinery 

By claiming tax deductions for these costs, you can effectively reduce your taxable income, leading to potential tax savings.

Operating expenses

The following is a list of some of the operating expenses a freelancer can claim deductions for.

• Insurance premiums

• Bank fees

• Interest on business loans

• Software subscriptions

• Advertising/Marketing expenses

• Legal Expenses

• Uniform fees

Keeping thorough records of these expenses is crucial for accurate tax reporting and maximizing your deductions.

Home office expenses

If you work from home on a full or part time basis you may be eligible to claim a deduction for some of your home expenses.

These expenses can be divided into running and occupancy expenses. 

Occupancy expenses are the costs associated with running your freelance business out of your home, for example, rent, property insurance or land taxes. 

You can calculate your tax deduction for your occupancy expenses using the following formula:

Tax deduction = Total cost ✕  % of floor area in your home you use for your freelance work ✕ % of the year your home work space was used for work exclusively 

Running expenses are the costs associated with the equipment and tools you need to run your business, for example, home office equipment, utilities or repairs. 

You can calculate your deduction for running expenses by deducting 52 cents for each hour you work from home.

Tax deductions can be claimed on your annual tax return. You can of course claim these deductions yourself. On the other hand, why spend hours going through tax paperwork when you can get a tax professional to do this on your behalf. 

At Taxback we will file your Australian tax return on your behalf and ensure you claim every deduction you are entitled to.

Simply apply today to get started. 

Want to Learn More About Australian Tax?

DOWNLOAD YOUR FREE TAX GUIDE HERE

Keeping your tax records

As mentioned above, there are some allowable receipt-free deductions. These include: 

• Vehicle expenses (68 cents per km travelled during the year, up to 5000 km)

• Uniform expenses (Up to $150)

• Running expenses (Up to 52 cents per hour) 

The ATO requires that you keep records of all your deductible expenses.

For most work-related expenses you can claim up to $300 without needing a receipt or proof of the expense. 

Superannuation 

Superannuation is money that you put aside throughout your years working. These savings replace your income when you retire. 

As a freelancer, you are not under any obligation to pay superannuation. However, if you choose to remain in Australia and become a resident, your future self may appreciate you saving this money!

As a freelancer, there is no employer to do this for you, so you will have to arrange this yourself if you wish to pay into a super fund. 

If you do choose to pay super, and decide to leave Australia, you can claim a superannuation refund!

To claim your Australian superannuation refund all you have to do is get in touch with us, fill out our short super refund pack and we will take care of the rest. 

Need a hand with your Australian taxes?

Taxback can help you to prepare and file your Australian tax return!

We will ensure you are fully compliant with the ATO and claim every deduction you’re entitled to! We will help you claim your Australian tax back!

Get a FREE estimate of your tax refund by simply using our tax back calculator!

Why choose Taxback? 

• Maximum legal refund and 100% tax compliance

• Simple online process- no complicated forms

• We will send your tax refund straight into your bank account anywhere in the world

• You can use our tax refund calculator to find out if you are due tax back

• You can claim Australian super online

• Live chat team available 24/7 to assist with your queries

Apply for your Australian tax refund with Taxback today!