January has become a quiet pressure point for many new arrivals to Australia. With the financial year already half gone, migrants preparing to lodge their first Australian tax return often realise they are navigating an unfamiliar system while trying to settle into work, housing and everyday life.
That timing matters. Net overseas migration added around 300,000 people in 2024–25, according to ABS data, meaning a large cohort is encountering Australia’s tax rules for the first time. For H&R Block Australia, this period consistently exposes the same gaps in understanding.
Mark Chapman, Director of Tax Communications at H&R Block Australia, says the shock often begins with how responsibility is structured. “One of the biggest challenges new migrants face is understanding that the Australian tax system is very different from what they may be used to overseas. Australia operates on a self-assessment system, which means taxpayers are responsible for declaring all relevant income correctly, rather than relying on the tax office to calculate everything for them.”
That shift in responsibility feeds into broader confusion about what counts as income. Chapman notes that uncertainty around overseas earnings is common and can linger well into the first return. “Another common difficulty is confusion around what income needs to be declared. Many migrants are unsure whether overseas income, foreign bank interest, shares, rental properties, or pensions need to be reported once they arrive in Australia. This uncertainty often leads to under-reporting, which can cause issues later if the ATO reviews the return.”
Arrival dates create another layer of complexity. Migrants who enter Australia partway through a financial year often struggle to identify which income sits inside the Australian system and from when. “Timing is also a challenge,” Chapman says. “Migrants may arrive partway through a financial year and struggle to work out which income falls into the Australian tax net and from what date. Add to that unfamiliar concepts like Medicare levy, superannuation, PAYG withholding, and tax file numbers (TFNs), and the first year can feel overwhelming without proper guidance.”
January, however, offers a chance to get ahead of those problems. Chapman describes it as an ideal moment to organise the basics before deadlines tighten. “January is an excellent time for new migrants to get organised. The first priority is ensuring they have a Tax File Number (TFN), as this is essential for employment, lodging tax returns, and interacting with the ATO.”
“Many migrants are unsure whether overseas income, foreign bank interest, shares, rental properties, or pensions need to be reported once they arrive in Australia. This uncertainty often leads to under-reporting, which can cause issues later if the ATO reviews the return.”
Record-keeping is the next discipline that often separates smooth lodgements from stressful ones. “They should also start keeping good records early. This includes payslips, employment contracts, bank statements, and records of any overseas income earned after arriving in Australia. Good record-keeping reduces stress at tax time and helps ensure income is declared correctly.”
Underlying many first-year mistakes is a misunderstanding of tax residency, a concept Chapman says is frequently confused with visa status or citizenship. “I explain tax residency as a set of rules that determines how much of your income Australia is entitled to tax. Importantly, tax residency has nothing to do with citizenship or visa labels—it’s based on factors such as where you live, work, and intend to settle.”
The consequences of getting that status wrong can be costly. “If you are considered an Australian tax resident, you generally need to declare your worldwide income, including income earned overseas. If you are a non-resident for tax purposes, you usually only declare Australian-sourced income. This distinction matters enormously because getting it wrong can result in either underpaying tax (leading to penalties and interest) or overpaying tax unnecessarily.”
Chapman says many new arrivals assume their recent move automatically makes them non-residents for tax purposes, an assumption that does not always hold. “Many migrants assume they are non-residents simply because they are new to Australia, which is not always correct. Properly determining tax residency early can prevent costly errors and give migrants confidence that they are meeting their obligations.”
When mistakes do appear in first-time returns, they tend to follow familiar patterns. “One of the most common errors is failing to declare overseas income, particularly foreign bank interest or employment income earned after arriving in Australia. Another frequent mistake is misunderstanding residency status and lodging the wrong type of tax return as a result.”
Errors around timing also recur. “We also see issues with incorrect start dates—migrants may declare income for the entire financial year when they only arrived partway through it, or they may miss income that should have been included from their arrival date.”
Most of these problems, Chapman argues, are avoidable. “These mistakes are easily avoided by seeking advice early, keeping clear records, and not making assumptions based on how tax worked in their home country. Using a registered tax agent who understands migrant tax issues can also significantly reduce the risk of errors.”
For migrants looking for reliable information, Chapman points first to clear explanations rather than technical detail. “The H&R Block website is useful (Tax Return & Tax Accountants in Australia | H&R Block Australia), with lots of information for new migrants to understand their tax obligations, written in plain English. The Australian Taxation Office website is also a good starting point, as it has dedicated resources for newcomers to Australia. However, the information can be technical, so professional guidance is often invaluable.”
That guidance, he says, pays off early. “I strongly recommend new migrants speak with a registered tax agent like H&R Block, particularly in their first year. A short consultation can clarify residency status, overseas income obligations, and record-keeping requirements, which often saves money and stress in the long run.”
Beyond formal advice, Chapman points to the role of trusted community channels. “Community organisations, migrant support centres, and ethnic media also play an important role in bridging the information gap. Education and early support are key—when migrants understand the system from the start, they are far more likely to stay compliant and feel confident managing their finances in Australia.”
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