Guide to Global Payroll Management

AUSTRALIA

AUSTRALIA
Effective October 1, 2002

Social security coverage and tax rules
An employee sent by a U.S. employer to work in Australia for five years or less is covered
and taxed under the U.S. social security system. An employee sent by a U.S. employer to
work in Australia for more than five years, or hired in Australia by a U.S. employer, is covered
and taxed under the Australian system.
An employee sent by a Australian employer to work in the U.S. for five years or less
is covered and taxed under the Australian social security system. An employee sent by a
Australian employer to work in the U.S. for more than five years, or hired in the U.S. by a
Australian employer, is covered and taxed under the U.S. system.

Request for a coverage certificate
To establish an exemption from coverage under the U.S. social security system, the
employer in Australia must request a certificate of coverage (form AUS/USA 1) from the
Australian Taxation Office. This can only be done over the Internet using a special online
request form that is available through https://www.ato.gov.au/Business/Super-for-employers/
In-detail/International-workers-and-agreements/Super-for-employees-working-overseas--certificate-of-coverage/.
A certificate of coverage issued by the government of Australia should be retained by the
employer in the U.S. in case the employer is subjected to an IRS audit. Do not send a copy
of the certificate to the IRS unless specifically requested by the IRS.

Rules on combining work credits
An employee who does not have enough work credits to qualify for Australian social
security benefits, but who has had at least 12 months of residence in Australia (at least 6 of
which must have been continuous), may combine social security credits from the U.S. and
Australia to meet eligibility requirements for Australian benefits.

Summary of social security benefits
Note: Normally, a person must be resident and physically present in Australia to file a
valid claim for Australian social security benefits. Benefit amounts are generally reduced if
income or resources exceed specified levels.
Retirement/old age. Full retirement benefits are payable to men at age 65 and women
at age 62 (increasing gradually for women to age 65 in 2013) with at least 10 years of residence between age 16 and retirement age, including a continuous period of residence of at
least 5 years.
Disability. A benefit payable if a person is permanently blind or if disability will prevent
work, training, and rehabilitation for at least 2 years. There is no minimum residence requirement if the disability occurs while a permanent resident of Australia. If the disability occurs
outside Australia, a person must have at least 10 years of residence, including a continuous
period of at least 5 years.
A partner who provides constant care at home for a person receiving either an Australian
age or disability pension is eligible for a carer payment.

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https://www.ato.gov.au/Business/Super-for-employers/ In-detail/International-workers-and-agreements/Super-for-employees-working-overseas--- certificate-of-coverage/ https://www.ato.gov.au/Business/Super-for-employers/ In-detail/International-workers-and-agreements/Super-for-employees-working-overseas--- certificate-of-coverage/ https://www.ato.gov.au/Business/Super-for-employers/ In-detail/International-workers-and-agreements/Super-for-employees-working-overseas--- certificate-of-coverage/

Guide to Global Payroll Management - 2020

Table of Contents for the Digital Edition of Guide to Global Payroll Management - 2020

Guide to Global Payroll Management - 2020 - B-2

Guide to Global Payroll Management - 2020

Table of Contents for the Digital Edition of Guide to Global Payroll Management - 2020