The Income Tax Amendment (Labour Mobility Program) Bill 2022 was passed by the Australian Parliament and received Royal Assent on December 5, 2022. This legislation reduces the income tax rate (and associated PAYG withholding rate) on certain income earned by foreign resident workers who are participating in the Pacific Australia Labour Mobility scheme.
Effective from July 1, 2022, the tax rate on this income will be reduced from marginal rates starting at 32.5% to a flat rate of 15%. This means that eligible foreign resident workers will pay a lower rate of tax on their income earned in Australia under this program.
This tax reduction applies only to foreign resident workers who are participating in the Pacific Australia Labour Mobility scheme. Other foreign resident workers will still be subject to the regular tax rates for non-residents.
The tax reduction will only apply to certain types of income earned by eligible workers, such as salary, wages, commission, bonuses, or allowances. Other types of income, such as investment income or capital gains, will still be subject to the regular tax rates.
To review the Income Tax Amendment (Labour Mobility Program) Bill 2022, visit the Australian Government website
Ref: Income Tax Amendment (Labour Mobility Program) Bill 2022