How many Americans live in Australia?
Published on February 06, 2025
by Jeff Patterson
Reviewed by
Jeff Patterson is an American living in Scotland and joined the team at Expat Tax Online after experiencing the complexities of living abroad with a family.
Table of Contents
As of 2024-2025, more than 100,000 Americans are living in Australia. This includes permanent residents, temporary visa holders, and dual citizens who have relocated for work, study, or family reasons.
What do US expats need to know about the Australian tax system?
The Australian tax system is based on a progressive tax rate, meaning higher incomes are taxed at higher rates. The Australian Taxation Office (ATO) manages tax collection, and the tax year runs from July 1 to June 30 (unlike the US, which runs from January to December).
- Australian tax residents are taxed on worldwide income, while non-residents are taxed only on Australian income.
- If you live in Australia for a long time, you may become a tax resident and need to pay taxes on all income you earn worldwide.
- Just like in the US, you file a tax return each year if you meet the income requirements.
- Expats can use the Foreign Tax Credit (FTC) to avoid double taxation between the US and Australia.
- Australia has higher tax rates than the US.
- Many expats hire local tax professionals or use tax software to handle their taxes efficiently.
Why do Americans move to Australia?
Many Americans move to Australia for career opportunities, education, or lifestyle changes.
Australia has a strong economy, offering jobs in industries like technology, healthcare, and education. Its universities attract international students, and many Americans relocate to join family members or partners.
The country offers several Australian visa options, including skilled worker visas, student visas, and family-sponsored visas.
Where do most Americans live in Australia?
Most Americans settle in Sydney, Melbourne, and Brisbane, where jobs, universities, and expat communities are plentiful.
- Sydney is a hub for finance, business, and technology.
- Melbourne is known for its arts, culture, and education sector.
- Brisbane offers a warm climate and a growing job market with more affordable housing.
Some Americans also prefer smaller towns or regional areas for a lower cost of living and a quieter lifestyle, especially retirees and remote workers.
How are the US and Australia connected culturally?
The US and Australia have a strong relationship based on trade, defense, and cultural exchange.
- Entertainment: American movies, music, and fashion are widely popular in Australia, while Australian artists find success in the US.
- Education & Research: Both countries collaborate in scientific research, student exchange programs, and business partnerships.
- Sports: Australians follow American basketball and football, while some Americans develop an interest in rugby and cricket.
What types of jobs do most Americans hold in Australia?
Americans work in a wide range of industries, including:
- Technology: Software developers and IT specialists are in demand.
- Healthcare: Doctors, nurses, and allied health professionals fill crucial roles.
- Education: Many Americans teach in schools and universities.
- Finance & Business: US professionals work in banking, accounting, and consulting.
- Mining & Engineering: Australia’s resources industry provides jobs, especially in Western Australia.
Some Americans also run businesses or work remotely for US-based companies while living in Australia.
To work legally, you may need visa sponsorship, qualification assessments, or professional licensing.
Does the US and Australia have a totalization agreement?
Yes, they do. The US-Australia Totalization Agreement prevents Americans from paying Social Security taxes to both countries at the same time.
How does this agreement work?
- If you work for a US company in Australia for less than 5 years, you can keep paying US Social Security and skip Australian contributions.
- If you work for an Australian company, you pay into Australia’s system (Superannuation) instead of US Social Security.
Why use the IRS Streamlined Tax Amnesty Program?
It’s for American citizens that didn’t know they had to file U.S. tax returns each year, and have therefore fallen behind. Some more than 30 years! With the IRS Streamlined Procedure, say goodbye to overdue tax returns, late fees, and penalties.
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Who benefits from this agreement?
- US Expats – Avoids paying double Social Security taxes.
- Retirees – Can combine work history from both countries to qualify for benefits.
- Employers – US businesses don’t have to pay Australian payroll taxes for temporary assignments.
This agreement helps expats plan for retirement while living abroad.
How does Superannuation affect US expats?
Superannuation (or “Super”) is Australia’s retirement savings system. Employers must contribute a percentage of an employee’s salary into a Superannuation fund, which grows over time.
- Employer Contributions – If you work for an Australian company, your Australian Employer must pay into your Super account.
- Superannuation Account – Similar to a 401(k) in the US, but mandatory for Australian workers
- Self-Employed Expats – Can voluntarily contribute to Super for retirement savings.
- Investment Growth – Super funds grow through stocks, bonds, and real estate investments.
- US Tax Implications – The US may still tax Superannuation earnings, making retirement planning tricky for expats.
Can expats withdraw Superannuation early?
Usually, Super is locked until age 60. However, some people can withdraw it earlier if:
- They leave Australia permanently (for temporary residents only).
- They experience severe financial hardship.
How does Superannuation affect US taxes?
The IRS does not treat Superannuation as a tax-free retirement account, meaning:
- Employer contributions and investment growth may be taxable under US law.
- US-Australia tax treaties don’t always protect Super from US taxation.
Since Superannuation rules can be complicated, it’s best to consult a tax expert who understands both US and Australian tax systems.
Is it easy for Americans to adapt to life in Australia?
Most Americans find it fairly easy to adjust because both countries share a common language and similar lifestyle. However, there are key differences:
- Healthcare: Australia has a public healthcare system (Medicare), which is different from the US model.
- Local Holidays & Customs: Australia Day, ANZAC Day, and Melbourne Cup Day are major national events.
- Cost of Living: Major cities, especially Sydney and Melbourne, can be expensive.
Joining networking events, cultural activities, or expat groups such as Expat Tax Online Facebook Group can help with the transition.
What steps should I take to move to Australia?
Moving to Australia involves several steps:
- Choose the Right Visa – Options include skilled worker, student, and family visas.
- Meet Qualification Requirements – Some professions require certification or skills assessments.
- Secure Sponsorship (If Required) – Some visas need an employer or family sponsor.
- Gather Required Documents – Ensure your passport, birth certificates, and qualifications are in order.
- Sort Out Healthcare – You may need private health insurance to meet visa conditions.
- Understand Tax Obligations – Know how US and Australian taxes work together.
- Find Housing – Research where you want to live and arrange temporary or permanent housing before arrival.
How the Australian and US tax systems affect expats
Australia’s tax system operates under a progressive tax rate system, meaning tax rates increase as income rises.
The Australian Taxation Office (ATO) is responsible for collecting taxes, and tax residents in Australia are required to pay taxes on their worldwide income. If you’re considered a tax resident of Australia, your US income—such as earnings from US rental properties or investments—may also be subject to Australian tax.
At the same time, the Internal Revenue Service (IRS) still requires you to file a US tax return, even if you don’t earn income in the United States.
What are some key tax rules for American expats in Australia?
- Filing Requirements for Expats – Even if you live and work in Australia, you must still file a US tax return (Form 1040) if your taxable income exceeds the standard filing threshold. The filing requirement applies whether you’re employed by an Australian company, self-employed, or own a business in Australia.
- Foreign Earned Income Exclusion (FEIE) – The Foreign Earned Income Exclusion (FEIE) allows qualifying expats to exclude up to US$130,000 (for tax year 2024) of their foreign-earned income from US taxes. To qualify, you must meet either the Physical Presence Test (living outside the US for at least 330 days in a 12-month period) or the Bona Fide Residence Test (establishing residency in another country for a full calendar year).
- Foreign Tax Credit (FTC) – If you pay Australian income tax, you may be able to claim the Foreign Tax Credit (FTC) on your US tax return. This credit helps reduce US taxes by applying a dollar-for-dollar credit for taxes paid to the ATO. Since Australia’s tax rates are often higher than US tax rates, many expats find that using the FTC eliminates their US tax liability.
- Foreign Housing Exclusion or Deduction – The Foreign Housing Exclusion or Deduction allows expats to deduct certain housing costs, such as rent, utilities, and property insurance, from their taxable income. This is especially useful for expats living in high-cost cities like Sydney and Melbourne, where housing expenses can be significant.
- Superannuation and US Taxation – Australia’s superannuation system is a mandatory retirement savings plan, where employers contribute a percentage of an employee’s income to a superannuation fund. While this is a tax-advantaged account under Australian law, the US does not automatically recognize superannuation as a tax-free retirement account. This means that contributions, earnings, and withdrawals may be taxable in the US, depending on your specific situation.
- Totalization Agreement Between the US and Australia – If you work in Australia, you may need to contribute to Australia’s Social Security system through superannuation and income tax withholding. The US–Australia Totalization Agreement prevents double taxation on Social Security contributions, ensuring you don’t have to pay into both countries’ systems at the same time. This agreement helps American expats determine whether they should pay into US Social Security or Australia’s system based on their length of stay and employment status.
- FBAR (Foreign Bank Account Report) and FATCA Compliance – If you have Australian bank accounts with a combined balance of US$10,000 or more at any time during the year, you must file an FBAR (Foreign Bank Account Report) using FinCEN Form 114. This includes checking accounts, savings accounts, and investment accounts held in Australia.
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- Additionally, under the Foreign Account Tax Compliance Act (FATCA), you may need to file Form 8938 if your foreign financial assets exceed US$200,000 (for single filers living abroad). This requirement ensures that the IRS receives information about expats’ foreign financial holdings.
- Business Taxation for American Entrepreneurs in Australia – If you own a business in Australia, the IRS and ATO may both require tax filings. Whether your business is a sole proprietorship, partnership, or corporation, understanding permanent establishment rules is crucial. If your business has a physical presence in Australia, it may be subject to Australian corporate taxes, and you may need to report your foreign business income on your US tax return.
How do I stay compliant with both tax systems?
- Use tax treaties – The US–Australia Tax Treaty outlines which country has the right to tax specific types of income and helps avoid double taxation.
- Work with a tax professional – Since Australia and the US have different tax systems, consulting a tax professional familiar with both countries’ rules can help you file correctly and take advantage of available deductions and credits.
- Keep detailed financial records – Maintain records of your income, tax payments, bank accounts, and business activities to ensure you meet both IRS and ATO reporting requirements.
- File on time – US expats automatically get an extension until June 15 to file their tax returns, but any taxes owed are still due by April 15. If more time is needed, you can request an extension until October 15.
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