What withholding tax applies to foreign residents earning Australian income?

Foreign residents are taxed differently to Australian residents. Employment income earned in Australia is taxed at a flat rate of 32.5% on the first $135,000 (no tax-free threshold) and 45% above that. There is no Medicare levy for foreign residents, but they also cannot claim the tax-free threshold or most tax offsets.

Dividend withholding tax is 30%, reduced to 15% for dividends paid to residents of countries with which Australia has a double tax agreement. Unfranked dividends from Australian companies are subject to this withholding; franked dividends are generally exempt from withholding on the franked portion.

Interest withholding tax is generally 10% on interest paid to non-residents by Australian financial institutions and companies.

Royalty withholding tax is 30%, also typically reduced by tax treaty.

Foreign residents selling Australian real property are subject to the foreign resident capital gains withholding (FRCGW) regime. Buyers must withhold 15% of the purchase price at settlement for contracts on properties valued at $750,000 or more, remitting it to the ATO. The seller then lodges a tax return to determine the actual tax payable and receives a credit for the amount withheld.