The Australian Tax System for British GPs Working in Australia

If you’re considering applying for GP jobs in Australia, you’ll certainly need to think about the financial aspects of moving to Australia. You might want to think about the cost of living in Australia as well as the Australian tax system and how it affects your take-home pay. If you own property in the UK and plan to keep it, you might also want to know how Australia taxes any income earned for overseas properties.

Average GP Salary Australia

Average GP salaries in Australia are relatively good with most GPs earning between AUS$200,000 to $400,000. Most of our GPs have a higher wage in Australia than they did in the UK.

GPs in Australia  often earn a percentage of the billings rather than a fixed salary. This takes into account the number of patients they see, the complexity of the consultations and the number of hours worked. Our GPs have found that this payment system gives them more control over their take-home pay.

Paying Tax as a British GP Working in Australia

As a general practitioner, you can move to Australia on either a temporary or permanent work visa since medical occupations currently qualify under the long-term strategic skill list. Your visa and how long you intend to stay will impact whether you are an Australian resident for tax purposes. The vast majority of our GPs relocate on a Temporary Skilled Shortage Visa (TSS 482) and would be classed as an Australian resident for tax.

Australian residents must declare any income earned from anywhere in the world. However, can also take advantage of Australia’s tax-free threshold and tax offsets. Australian residents also typically receive a lower tax rate than foreign residents.

Australia’s Tax System: How to Pay Tax

Before you begin working as a GP in Australia, you’ll need to get a tax file number, also known as TFN. The Australian income year ends on June 30th and most people will need to file an annual tax return prior to this date. You’ll primarily be taxed on income and the amount you pay will depend on whether you’re an Australian or foreign resident.

Paying Tax in Australia as an Australian Resident

Australia residents are entitled to claim a tax-free threshold of AUS$18,200 per year. This means you’ll only be taxed on income over the minimum threshold. You’ll also need to pay the Medicare levy, roughly 2% of your income, which helps support the country’s healthcare. In general, Australian residents using a TFN typically pay lower tax rates than foreign residents.

If you’re an Australian resident but only have a temporary resident visa, most of your foreign income won’t be taxed while you’re living in Australia. However, Australia does collect tax on work you complete overseas, for example, hosting an overseas conference, while living in Australia. More information about foreign income exemptions for temporary residents is available here.

Paying Tax in Australia as a Foreign Resident

It’s relatively rare for British GPs working in Australia to be classed as a foreign resident. As long as you’re taking steps to make Australia your home and plan to live here for more than six months, you’ll be classed as an Australian resident for tax purposes. If you’re a foreign resident for tax purposes, you’ll need to declare and pay tax on any income earned in Australia including employment or rental income, Australian pensions, and capital gains. Read more about paying tax as a foreign resident here.

Australian Tax System: Paying Tax on Overseas Property

Sometimes when our GPs move to Australia, they still own property in the UK. If you rent or sell this property and are classed as an Australian resident, you’ll probably need to pay tax. Any income or capital gains from overseas property must be declared in your Australian tax return. You may be able to claim a foreign income tax offset if you’ve already paid tax on income or capital gains in another country.

Australia’s Tax System: Overseas Pensions & Annuities

As an Australian resident, you’ll also need to pay tax on any UK pensions in payment or annuities. In some cases, you can choose to deduct and have some of your annual pension or annuity income personal contributions returned to you (also known as undeducted purchase price). If your pension or annuity has been taxed in the UK and Australia, you might be able to claim a foreign income tax offset on your Australian tax returns.

More information about overseas pensions and annuities is available here.

Paying Tax in Australia on Offshore Bank Accounts

If you decide to keep your UK bank account, you’ll need to report any interest or other income earned in your Australian tax income. Failing to declare this information could lead to financial penalties.

Working as a GP in Australia

Once you’ve secured a work visa and arrived in Australia, you need to apply for a TFN and complete a tax file number declaration. This declaration will help your employer determines whether you’ll pay tax as an Australian or foreign resident and how much tax to withhold from your salary.

You must provide the declaration to your employer within 28 days of starting your GP job or you’ll need to pay the higher tax rate. After completing this initial paperwork, your employer will deduct taxes and submit them to the government.

Returning to the UK

While most of our GPs choose to make Australia their home for life, some decide to return to the UK. When you leave Australia, you’ll still need to submit a tax return. If you’re departing before the end of the tax year and don’t plan to return, you can lodge an Australian tax return early.

Ready to Move to Australia?

View our excellent GP job vacancies located throughout Australia or speak to one of our specialist recruitment professionals. Transition Medical is here to support you throughout every stage of your move from finding outstanding opportunities, securing Australian work visas and getting settled in your new home. Read our testimonies to learn about other GPs that we’ve helped make the move.

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