485 Visa Tax Return Australia — FY2025-26 Graduate Visa Tax Guide
Subclass 485 holders typically transition from study into substantive full-time work, and most are tax residents from day one of the visa. This page sets out how the four ATO residency tests apply, your applicable resident rates, Medicare Levy by reciprocal health country, and the deductions available now that you are in real ongoing employment.
The Temporary Graduate visa (subclass 485) usually runs for two to four years and is held by people moving from study into substantive paid work in their field. Compared to a student visa, your living pattern shifts: you sign longer leases, work full-time hours, often join a single employer for an extended period and may relocate for work. That settled pattern is exactly what the ATO Resides Test looks for, so most 485 holders are tax residents from the date their visa is granted, and remain residents for the entire visa period.
As a resident for tax purposes, you receive the $18,200 tax-free threshold, the standard resident marginal rates and access to the Low Income Tax Offset where applicable. However, you remain a temporary visa holder and several rules continue to differ from those for citizens and permanent residents. Most importantly, the HECS-HELP scheme does not extend to 485 visa holders, so any postgraduate study you fund yourself remains outside the loan system and is generally not deductible unless it directly maintains skills used in your current paid Australian job.
Medicare Levy treatment depends on whether your country has a Reciprocal Health Care Agreement with Australia. Holders from RHCA countries such as the United Kingdom, Ireland, Italy, the Netherlands and New Zealand can usually enrol in Medicare and become liable for the 2% Medicare Levy and the Medicare Levy Surcharge above relevant income thresholds. Holders from non-RHCA countries should obtain a Medicare Entitlement Statement to claim a full or partial exemption. Superannuation continues at 12% (final legislated rate from 1 July 2025), and on permanent departure DASP applies at the standard 35% non-WHM rate.
Tax residency rules
The four ATO residency tests apply to 485 visa holders in the same way they apply to anyone else, but a graduate's typical living pattern almost always satisfies the Resides Test. After your 485 grant you generally sign a longer-term lease, often with the same household for many months, your employment is substantive and ongoing rather than seasonal, you open Australian financial accounts at scale, and you build a clear social and professional life around one base. The Commissioner accepts these facts as classic indicators of residing in Australia. The Domicile Test is a secondary check — most 485 holders retain a domicile of origin overseas, but the Resides Test is already satisfied so the Domicile Test rarely changes the outcome. The 183-Day Test usually confirms residency over the income year, given that 485 visas run for two to four years. The Commonwealth Superannuation Test does not apply. There are some borderline situations to watch. If you spend extended periods overseas after graduation while waiting for a job offer, your Australian residency can be questioned for that part-year. If you split time between Australia and a base in your home country and never settle anywhere here for long, the Resides Test can fail despite holding a 485. Documenting your lease, employment contract, bank accounts and Medicare or private health enrolments protects your residency position if the ATO ever asks for evidence in a review.
Applicable tax rates
Resident FY2025-26 rates apply: 0% up to $18,200, 16% from $18,201 to $45,000, 30% from $45,001 to $135,000, 37% from $135,001 to $190,000 and 45% above that. The Low Income Tax Offset of up to $700 phases out by $66,667. Medicare Levy of 2% applies if you are enrolled in Medicare; holders from RHCA countries usually are, so they pay the levy and may face MLS at higher incomes if they do not hold appropriate private hospital cover. Holders from non-RHCA countries should apply for a Medicare Entitlement Statement to claim a full or partial exemption. HECS-HELP is not available, so no compulsory repayments are deducted. On permanent departure, super is paid out as DASP and taxed at 35% on the taxed component — the standard non-WHM rate.
Common deductions
- 1Substantive work-related expenses including industry-specific tools, software subscriptions and reference materials directly used in your current paid role.
- 2Professional registration, association membership and licensing fees required to practise in your field, such as ACS, AHPRA, CPA Australia or Engineers Australia dues.
- 3Self-education that maintains or upgrades skills used in your current Australian employment, including short courses, certifications and conferences with itemised receipts.
- 4Working from home running expenses using either the 70 cents per hour fixed-rate method or the actual cost method, supported by a representative four-week diary.
- 5Work-related car expenses for client visits or travel between two work sites under either the cents-per-kilometre method (capped) or the logbook method with a 12-week diary.
- 6Tax agent fees paid in the previous financial year for preparing your return, fully deductible in the year of payment.
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Frequently asked questions
Am I a tax resident on a 485 graduate visa?
In the great majority of cases yes. Once your 485 is granted you typically sign a longer lease, work full-time hours with one employer and build a stable life in one location, all of which satisfy the Resides Test from the visa grant date. The 183-day test usually confirms residency later in the year. The narrow exceptions are graduates who spend long periods overseas waiting for a role, or those who keep a primary home base abroad and only stay in Australia in short bursts.
Do I pay the Medicare Levy on a 485 visa?
It depends on your country of citizenship. Holders from countries with a Reciprocal Health Care Agreement (United Kingdom, Ireland, Italy, the Netherlands, New Zealand and several others) can usually enrol in Medicare and become liable for the 2% Medicare Levy. Holders from non-RHCA countries — for example, China, India and Vietnam — should apply to Services Australia for a Medicare Entitlement Statement and claim the levy exemption. The Medicare Levy Surcharge only applies if you are subject to the levy in the first place.
Can I access HECS-HELP for further study on a 485?
No. HECS-HELP is restricted to Australian citizens, permanent residents and certain humanitarian visa holders. As a 485 holder you must pay any further course fees upfront. These fees are generally not deductible because they are private in nature, unless the course directly maintains or improves the specific skills used in your current paid Australian role — and even then only the directly related portion qualifies. A typical example would be a working accountant taking a CPA Australia module while employed in an accounting role.
What deductions are most relevant for 485 holders in full-time work?
Because you are now in substantive ongoing employment, the deduction picture is much wider than during study. Common items are professional registration fees, industry-relevant subscriptions and journals, work tools and equipment, work-from-home running costs using the 70-cent fixed-rate method, work-related car travel evidenced by a logbook, and self-education that maintains current job skills. Always keep receipts and a four-week phone or internet diary, and treat the home-to-work commute as private rather than deductible.
How is super treated when I leave Australia after my 485 expires?
Your employer pays 12% Superannuation Guarantee throughout your employment. When the 485 visa ends and you leave Australia permanently — for example, returning home or transitioning to a sponsorship pathway abroad — you submit a DASP application. As a non-WHM visa holder, the taxed component of your super is taxed at 35% under DASP, much lower than the 65% rate for working holiday makers. Apply within six months of departure for the simplest experience and consider consolidating accounts before you go.
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