Reference
Notes for tech employees relocating to Sydney
Tech employees moving from the United States to Sydney — typically as part of a global rotation, an international transfer, or a new role at the Australian office of a US-headquartered tech company — encounter a financial system that looks superficially similar to the US one and is meaningfully different in detail. This is a reference page covering the parts that come up most often. It is not a substitute for advice from a tax practitioner who works the US-Australia route; you almost certainly need one.
Tax residency and the tax year
Australia's tax year runs from 1 July to 30 June, not the calendar year. Tax residency is determined by a fact-pattern test that considers physical presence, intent, family ties, and assets — not solely by visa class. You can be a tax resident of Australia without becoming a permanent resident; you can also remain a US tax resident (because the US taxes citizens and green card holders on worldwide income regardless of where they live) at the same time.
The practical implication: in your move year, you may have parts of your income subject to US tax only, parts subject to Australian tax only, and parts subject to both jurisdictions simultaneously. Sorting this out requires careful records of arrival and departure dates, the source of each income stream, and where work was physically performed.
Superannuation: Australia's retirement system
Australian employers are required to make compulsory contributions to a superannuation account on behalf of employees — currently a percentage of ordinary time earnings, set by federal law and adjusted periodically. The percentage has been on a scheduled increase over the past several years; verify the current rate before relying on numbers in this guide.
Super contributions are made into a fund chosen by the employee (or the employer's default fund if no choice is made). Investment options inside super range from low-cost diversified pre-mixed options to self-directed investment menus, depending on the fund.
The US tax problem with super
For US persons (citizens, green card holders), Australian superannuation is a quietly difficult problem. The US tax treatment of super is unsettled: the IRS has not issued definitive guidance, and tax practitioners differ on whether super is treated as a foreign trust (which triggers extensive annual reporting obligations including Forms 3520 and 3520-A), as a foreign pension (which may have favorable treaty treatment), or in some cases as a foreign grantor trust with employee-grantor status.
The practical conservative approach for US persons living in Australia is:
- Make only the compulsory employer contributions; avoid voluntary salary-sacrifice contributions that increase the foreign-trust exposure.
- Engage a tax practitioner experienced with US-Australia situations before making any optional super contributions.
- Maintain detailed records of every contribution and every internal investment trade in the super account, in case Forms 3520/3520-A are required.
- Be cautious about which investment options are selected inside super — some non-US mutual fund-like options may be classified as Passive Foreign Investment Companies (PFICs) for US tax purposes, which is its own painful filing regime.
RSU taxation when you cross borders
For tech employees on global rotations, RSU taxation across borders is one of the more confusing topics. The general principle: RSUs are sourced for tax purposes based on where the work was performed during the vesting period. A grant made in the US that vests partway through an Australian assignment may have its vesting income split between the two jurisdictions in proportion to the time spent in each.
This requires:
- Tracking the grant date, vest date, and the workdays in each country during the vesting period.
- Calculating the apportioned income on each vest in each currency.
- Coordinating withholding (or making catch-up payments) in each jurisdiction.
- Claiming foreign tax credits in the appropriate country to avoid double taxation.
This is one of the situations where a generic CPA will be out of their depth. The cost of an experienced cross-border practitioner is small relative to the cost of doing this badly.
US-Australia tax treaty and double taxation
The US and Australia have a comprehensive tax treaty that, in principle, prevents double taxation of the same income. In practice, the foreign tax credit is the main mechanism: tax paid to Australia on a given income stream generally creates a credit that can be used against the US tax owed on the same income.
The credits don't always line up perfectly. Australia's tax brackets and rates differ from the US's, the timing of recognition can differ between jurisdictions, and certain income types (capital gains in particular) have different treaty handling. Some income may end up taxed at the higher of the two countries' rates.
Continuing US filing obligations
US citizens and green card holders living in Australia continue to have full US filing obligations, including:
- Form 1040 annually, reporting worldwide income.
- FBAR (FinCEN Form 114) reporting all foreign financial accounts above the aggregate $10,000 threshold. Australian bank accounts and superannuation accounts both count.
- Form 8938 (FATCA) if foreign financial assets exceed the higher reporting thresholds.
- Forms 3520 / 3520-A potentially required for super, depending on the practitioner's interpretation.
- State tax filings may continue if you maintain ties (a home, dependents, a driver's license) to a US state with worldwide-income rules — California is the most aggressive on this front.
The penalties for missing FBAR or 8938 are punitive — frequently many multiples of the unpaid tax, and applied per year and per account. Get this right.
Medicare, private health insurance, and the levy
Australia has a public healthcare system (Medicare, no relation to the US program of the same name) funded by a Medicare Levy on taxable income. Higher earners are subject to an additional Medicare Levy Surcharge unless they hold qualifying private hospital cover. For a high-earning tech employee, the surcharge is typically larger than the cost of basic private hospital cover, which is why most expat tech workers in Sydney carry private cover.
US health insurance does not satisfy the Australian private hospital cover requirement; the policy must be from an Australian-registered health fund.
Banking, currency, and cash flow
You will need an Australian bank account from approximately the day you start work. The major banks (Commonwealth, Westpac, ANZ, NAB) all offer expat-friendly account opening, but most require physical presence to verify ID. Plan to open an account in your first week.
Currency exposure is a quiet, ongoing issue: your salary is paid in AUD, your historical liabilities (US student loans, US mortgages) are in USD, and your existing investment portfolio is likely in USD. Major currency movements between AUD and USD over the course of a multi-year assignment can materially change the real value of those flows.
The standard approach is to keep working capital in AUD (rent, daily expenses), keep your US accounts intact for ongoing US obligations, and avoid large lump-sum currency conversions in either direction without a specific reason. Wise (formerly TransferWise), OFX, and similar services provide significantly better rates than retail bank wire transfers for the moves you do need to make.
Common mistakes
- Assuming US 401(k) and Australian super work the same way. They don't, and the US tax treatment of super is the single most under-anticipated complication of the move.
- Skipping FBAR. Penalties are massive. File even when you owe no additional tax.
- Selecting non-US mutual fund options inside super. Risks PFIC treatment for US tax purposes, which is its own filing nightmare.
- Trying to do RSU cross-border tax allocations without professional help. The math is solvable; the documentation requirements are not something to figure out under a filing deadline.
- Cancelling US accounts on the way out. Maintaining US bank and brokerage relationships is significantly easier than re-establishing them as a non-resident later.
This page is a pointer, not a plan. Cross-border tax is one of the few areas where the cost of a specialist is unambiguously worth it, even for relatively simple expat situations.