Permanent Resident Tax Return Australia (189, 190, 491 PR) — FY2025-26 Guide
Australian permanent residents holding subclass 189, 190 or transitioning from 491 are always tax residents from the day the PR is granted, and are taxed identically to citizens. This page covers your applicable resident rates, Medicare Levy and MLS rules, HECS-HELP availability and the full deduction range now available to you.
Subclass 189 (Skilled Independent), 190 (Skilled Nominated) and the 491 pathway leading to 191 PR are the most common permanent residency outcomes for skilled migrants. Once you hold permanent residency, you are an Australian tax resident from the grant date and remain a resident for as long as you intend to live here. Unlike temporary visa holders, your tax position is essentially identical to that of an Australian citizen — the same rates, the same Medicare entitlements, the same HECS-HELP access and the same full range of allowable deductions.
As a PR you receive the $18,200 tax-free threshold, the full set of resident marginal rates and the Low Income Tax Offset where applicable. You enrol in Medicare immediately on PR grant and pay the 2% Medicare Levy at relevant income levels. The Medicare Levy Surcharge applies on a sliding scale above $101,000 single income (and the family equivalent) if you do not hold appropriate private hospital cover for the year. Holding suitable private hospital cover for the full year removes any MLS charge.
Critically, HECS-HELP becomes available on PR grant, so any further study at an approved provider can be financed through the loan scheme rather than self-funded. Your worldwide income is subject to Australian tax once you become a tax resident, although you receive a foreign income tax offset for tax already paid overseas, subject to limits. Superannuation continues at 12% (final legislated rate from 1 July 2025); on permanent departure from Australia you cannot generally access DASP because PR holders are not eligible — the funds remain preserved until you reach a condition of release.
Tax residency rules
Permanent residents are tax residents from the moment PR is granted and remain so for as long as they actually live in Australia. The Resides Test is satisfied with overwhelming clarity once you settle here permanently — you have a permanent home, your family base is in Australia, your employment is local and ongoing, your finances are local and you are integrated into the community. The Domicile Test is the test most often raised for PRs who spend significant time overseas: under this test you are a resident if your domicile is in Australia, unless the Commissioner is satisfied that your permanent place of abode is overseas. PRs who relocate abroad for years at a time can in theory cease residency if they establish a permanent place of abode overseas, but this is rare and requires substantial evidence such as a foreign permanent home, a foreign job and family settled abroad. The 183-Day Test is rarely needed because the Resides Test already applies. The Commonwealth Superannuation Test does not apply to standard PR holders. Practical implications: even if you take a posting overseas for a year or two, you usually remain an Australian tax resident and continue to lodge a full Australian return that includes worldwide income. If you intend to leave Australia permanently, document your foreign permanent home, employment and family arrangements carefully — and consider professional advice on the date you cease to be a resident, because that triggers a deemed disposal of certain CGT assets and other one-off events.
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. You pay the 2% Medicare Levy on income above the relevant threshold (around $28,011 for singles). The Medicare Levy Surcharge applies at 1%, 1.25% or 1.5% above the singles threshold of $101,000 (and family equivalents) if you do not hold appropriate private hospital cover for the full year. HECS-HELP repayments apply if you have a HELP balance — under the new FY2025-26 marginal system (Universities Accord Act 2025) the threshold is now $67,000, then 15c on income above $67k, $8,700 + 17c above $125k, and a flat 10% on total income above $179,285. Foreign income is taxable in Australia, with a foreign income tax offset for tax already paid abroad, subject to limits.
Common deductions
- 1The full set of work-related expenses for any occupation, including industry-specific tools, equipment, software and reference materials used in your role.
- 2Professional registration fees, association membership dues and licensing costs in your field, such as AHPRA, CPA Australia, Engineers Australia or the Law Society.
- 3Working from home running costs using either the 70 cents per hour fixed-rate method or the actual cost method, supported by a four-week representative diary.
- 4Work-related car expenses for two-workplace travel and client visits, claimed via the cents-per-kilometre method or the logbook method with a 12-week diary.
- 5Self-education tied to current employment, plus full HECS-HELP eligibility for further study at approved providers, which you can fund through the loan rather than upfront cash.
- 6Investment-related deductions including interest on investment loans, share-trading subscriptions and investment property expenses (where holding such assets) and tax agent fees.
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Frequently asked questions
Am I always a tax resident on Australian PR?
In almost every case yes. Permanent residents have a permanent home, settled family arrangements and ongoing local employment, all of which satisfy the Resides Test from the day PR is granted. The only meaningful way to cease tax residency is to relocate overseas long-term and establish a permanent place of abode there, with strong evidence including a foreign permanent home, foreign employment and family settled abroad. This is rare and triggers important one-off tax consequences such as deemed CGT disposal events, so always seek professional advice before treating yourself as having ceased residency.
Do I have to pay the Medicare Levy and Surcharge as a PR?
Yes. PRs are eligible for Medicare from the day PR is granted, so the 2% Medicare Levy applies on income above the relevant threshold (around $28,011 for singles in FY2025-26, with phase-in just below). The Medicare Levy Surcharge applies on a sliding scale of 1% to 1.5% above $101,000 singles income and the family equivalent, but only if you did not hold appropriate private hospital cover for the full year. Holding suitable private hospital cover for every day of the year removes any MLS charge.
Can I use HECS-HELP for further study now I have PR?
Yes. HECS-HELP becomes available on PR grant, so further study at approved Australian providers can be funded through the loan scheme rather than self-funded. Compulsory repayments only kick in once your repayment income exceeds the FY2025-26 threshold of $67,000 — raised from $54,435 under the new marginal system. From there it's 15c on every dollar above $67k, rising to 17c above $125k, and 10% flat on total income above $179,285. Your employer will withhold extra tax against the HELP balance, which is reconciled when you lodge your return at year end.
What deductions are available to PRs that were not available on a temporary visa?
PRs have the full deduction range available to citizens and have access to several scenarios that were closed off on temporary visas. You can claim self-education funded through HECS-HELP, full investment-related deductions on Australian and overseas portfolios, deductible interest on investment loans and full negative gearing where applicable. You may also become eligible for spouse-related rules, family tax offsets and certain superannuation contribution caps and offsets in ways that temporary residents could not access.
Can I claim DASP super on my Australian PR if I move overseas later?
No. DASP is only available to former temporary visa holders whose visa has expired or been cancelled. As a permanent resident, your superannuation is preserved until you meet a standard condition of release, typically reaching preservation age and retiring. If you move overseas for an extended period as a PR, your super remains in your Australian fund until then, although you can usually still consolidate accounts, change investment options and make personal contributions from abroad subject to fund rules.
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