Scenario 1: Australian Resident posted overseas and all income is from a ‘Foreign Source’

Synopsis: Claudia commenced working for ABC Corporation on 16th July and returned a Tax File Number declaration with Australian Resident for tax purposes selected. Since commencing her employment, Claudia has been offered a position with a sister-company in England for a minimum 3 month period which she accepts and leaves Australia on 18 August 2017. She continues employment with the sister-company and returns to Australian permanently on 6 June 2018. During this period, Claudia returned to Australia from 20 April to 27 April 2016.

Result: As Claudia is in England for more than the minimum number of days required and the income earned is non-exempt due to the activity she completed whilst overseas, her Australian employer would be required to report the earnings and amounts withheld on a PAYG payment summary – foreign employment as the employer determined the earnings have a foreign source.

Setup: How do I add an Australian Resident Employee who works overseas and income is from a ‘Foreign Source’ using the Employee Wizard?


Scenario 2: Foreign Resident (lives Overseas) but works in Australia

Synopsis: Louie commenced working for XYZ Corporation on 10th August and returned a Tax File Number declaration with a Working Holiday Maker selected.
Result: As Louie has advised he is a Working Holiday Maker, he will be taxed according to whether his employer is registered as an employer of Working Holiday Makers

Setup: How do I add a new Working Holiday Maker Employee using the Employee Wizard?


Scenario 3: Foreign Resident (lives Overseas) but works in Australia

Synopsis: Sam commenced working for LMN Corporation on 9th September and returned a Tax File Number declaration with a Foreign Resident for tax purposes selected.

Result: As Sam has advised he is a foreign resident for tax purposes, he will be taxed based on Tax Scale 3.

Setup: How do I add a new Employee who is a foreign resident for tax purposes using the Employee Wizard?


Scenario 4: Australian Resident working both overseas and in Australia

Synopsis: Sally is an accountant who goes to the USA to work with her current company’s parent company while she continues to be paid by her Australian employer. Sally works with the parent company from 22 February 2016 to 16 September 2016, and during this time returns to Australia for the period 20 April to 27 April 2016.

Result: As Sally is in the USA for more than 60 days and the income earned is non-exempt, her Australian employer would be required to report the earnings and amounts withheld on a PAYG payment summary – foreign employment as the employer determined the earnings have a foreign source.

Setup: This employee would require 2 employment profiles in e-PayDay® to correctly generate BOTH an INB & FEI Payment Summary. How do I add an Australian Resident Employee who works overseas and income is from a ‘Foreign Source’ using the Employee Wizard? and How do I add a new PAYG (Pay As You Go) Employee using the Employee Wizard?


Scenario 5: Australian Resident working both overseas and in Australia

Synopsis: Eric is an Australian resident motor mechanic employed by a private company contracted by the Department of Foreign Affairs and Trade (DFAT) to provide vocational training in Vanuatu. He is posted to Vanuatu for 180 continuous days. Once this period is complete, Eric is posted to Western Australia with a new project.

Result: Eric’s foreign service is directly attributable to the delivery of Australian ODA by his employer. Therefore, his foreign earnings are eligible for an exemption, subject to the non-exemption conditions.

Setup: This employee would require 2 employment profiles in e-PayDay® to correctly generate BOTH an INB & FEI Payment Summary. How do I add an Australian Resident Employee who works overseas and income is from a ‘Foreign Source’ using the Employee Wizard? and How do I add a new PAYG (Pay As You Go) Employee using the Employee Wizard?

Revision: 19
Last modified: 2020/01/29

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