Moving to Australia from the US: tax, visas, and what nobody mentions

I have spent more than fifteen years in HR on the employer's side of Australian migration, and American arrivals are a distinct species. Around 90,000 US-born residents live in Australia, with roughly 4,000 to 6,000 more arriving each year. They tend to be senior, well paid, and thoroughly researched on the fun parts: the beaches, the coffee, the four weeks of annual leave. Then they land, and two structural differences that nobody at the farewell party mentioned start shaping every financial decision they make.

If you are working out how to move to Australia from the US, start with those two differences. Everything else is detail.

Difference one: the IRS moves with you

The United States is one of only two countries in the world (the other is Eritrea) that taxes its citizens on worldwide income regardless of where they live. Your British and Indian colleagues will stop filing home-country returns once they become Australian tax residents. You will not. As long as you hold a US passport, you file a US return every year, declaring your Australian salary, super contributions, and investment income.

In practice, most Americans on a salary owe little or nothing to the IRS from Australia. The Foreign Earned Income Exclusion (USD $126,500 at the 2024 figure) and the Foreign Tax Credit do the heavy lifting, and because Australian tax rates are higher than US rates at most income levels, the credit generally covers what would otherwise be owed. The cost is not the tax. It is the compliance:

• FBAR (FinCEN Form 114), filed annually if your foreign accounts exceed USD $10,000 in aggregate at any point in the year. Penalties for non-filing start at USD $10,000 or more per account per year.
• Form 8938 (FATCA), filed with your return once foreign financial assets pass the thresholds.
• The grey areas, such as how US rules treat Australian superannuation, where even specialist accountants take different positions.

The single best money decision an American mover makes is engaging a US-Australia cross-border tax accountant before flying, not after. Expect AUD $1,500 to $5,000 per year. Trying to DIY this particular combination is how smart people acquire expensive problems.

Your 401(k) stays put

You cannot roll a 401(k) into Australian superannuation under current rules without a significant US tax penalty. The most common approach, and usually the simplest, is to leave it in place, growing tax-deferred, with withdrawals after age 59½ taxed in the US. If the account is with a former employer, rolling it over to an IRA for better investment control is not a taxable event. What you should not do is cash it out early to fund the move: withdrawals before 59½ attract a 10 per cent penalty plus US tax. Get specialist advice before touching anything, especially Roth accounts, where the Australian tax treatment is contested.

Difference two: no Medicare safety net at first

Here is the one that genuinely surprises people. Unlike the UK, NZ, Ireland, Italy and a handful of other countries, the US has no Reciprocal Health Care Agreement with Australia. On a temporary visa such as the 482 or 485, you have zero Medicare access. None. Private Overseas Visitor Health Cover (OVHC) is essential, at roughly AUD $150 to $250 a month for a single and $300 to $500 for a family. Without it, a single GP visit costs $200 or more at private rates and an emergency department visit can run past $5,000.

Permanent residents and citizens get full Medicare. And once you are inside the system, the healthcare story flips into one of the strongest arguments for the move: predictable costs, public hospitals that handle serious conditions without insurance gatekeeping, and family private cover at $300 to $500 a month instead of the $1,500 to $2,500 employer-subsidised premiums you may be used to. Americans stop flinching at medical bills somewhere around month six.

The salary math, honestly

If you are coming from senior US tech or finance, Australia is a real compensation cut. US FAANG companies pay senior engineers USD $300K to $500K+ in total comp including equity; the Australian equivalents (Atlassian, Canva, AWS Australia) pay AUD $200K to $350K. The top marginal rate here is 45 per cent above $190K plus a 2 per cent Medicare Levy, against a US federal top rate of 37 per cent plus whatever your state takes.

Two things soften it. There is no state income tax anywhere in Australia, and employers pay 12 per cent superannuation on top of the advertised salary, not out of it. At 2026-27 settings, a $135,000 salary keeps roughly $101,280 after tax and Medicare Levy; $190,000 keeps roughly $134,830.

The honest pattern I have watched for fifteen years: people leaving peak FAANG or Wall Street comp look back wistfully at their US incomes. Mid-career professionals and families who weight healthcare, safety, schools and lifestyle over peak income tend to be the happy ones. Do the math carefully before you commit, and see our full breakdown of Australian salaries by occupation for the wider market.

Visas, in orientation terms only

This is a map, not migration advice. The routes American professionals most commonly travel:

Visa rules, fees and thresholds change often, typically each 1 July. This is general orientation, not advice for your situation. Only migration agents registered with OMARA, or Australian legal practitioners, may lawfully provide immigration assistance; verify any agent at mara.gov.au before paying anyone a cent. On that subject, read the scams that target new arrivals before you engage anyone.

What nobody mentions

You will be driving on the left

The consolation is that most Australian cars are automatic, so at least the transmission is familiar. Most US state licenses convert through the Recognised Country scheme, though it varies by state; some convert directly, others require theory and practical tests, at AUD $50 to $140. Enforcement is stricter than most US states: 13 demerit points in three years suspends your licence, phone-in-hand is $500+ and 4 to 5 points, and speed limits carry single-digit tolerance. Drive to the number.

Your credit score does not make the flight

FICO does not follow you. You arrive with zero Australian credit history and can expect first-application declines for phone contracts and car finance. A no-fee credit card used for groceries and paid in full each month builds a local file in about six months. It helps enormously to open an Australian bank account before you fly, both for arrival logistics and for moving your savings without a 2 to 4 per cent bank exchange margin.

Tipping is not a thing

Hospitality staff are paid award wages with weekend and night penalty rates. The price on the menu is the price. Rounding up for exceptional service is appreciated, never expected.

The distance is real

Sydney to LA is a 13 to 14 hour flight; Sydney to NYC is 20 plus. Sydney runs 15 to 18 hours ahead of US Eastern, so live calls with US colleagues mean someone is up at 3am. Factor it into both your career plans and your family's expectations, and into your budget too; our guide to the real cost of moving to Australia covers what the whole exercise adds up to.

Not ready for the full guide yet? Grab the free pre-departure checklist and start with the steps that matter in your first 30 days.