Tax file number and the Medicare levy: an American's first Australian tax season

Apply for your tax file number the week you arrive, and if you're not eligible for Medicare, get a Medicare Entitlement Statement before you file your first return.

The short version

• A tax file number (TFN) is free and you apply online if you're in Australia with work rights. It arrives by mail within 28 days [1].
• Without one, your employer withholds tax at the top rate, so this is not a "get to it later" item.
• Australia's tax year runs July 1 to June 30. If you file your own return, it's due October 31 [2].
• The Medicare levy is generally 2% of taxable income [3]. Americans on temporary visas who aren't entitled to Medicare can claim a full exemption with a Medicare Entitlement Statement [4].
• The Medicare levy surcharge adds 1% to 1.5% for higher earners without Australian private hospital cover, but an exemption category can take you out of it [5][6].

USD conversions in this guide use the Federal Reserve H.10 rate of October 30, 2026 (USD 0.7038 per AUD), rounded.

What a TFN is, and why you need one fast

Your TFN is a personal reference number from the Australian Taxation Office (ATO). Think of it as the Australian equivalent of using your Social Security number for tax purposes. You give it to your employer, your bank and your super fund.

You don't legally have to have one, but going without hurts:

• Employers must withhold tax at the highest rate if you don't provide a TFN.
• Banks withhold tax on interest at the top rate.
• You can't lodge a tax return or open most accounts smoothly without it.

Keep your TFN as private as your Social Security number. Don't post it in a group chat or email it to a landlord.

How to apply for a TFN

If you hold a visa with work rights and you're physically in Australia, you can use the ATO's online application for permanent migrants and temporary visitors [1]. Visas carrying "no work" conditions (8101, 8103 or 8116) can't use it [1].

1. Wait until you've landed. The online system only works once you're in Australia with your visa linked to your passport [1].
2. Have an Australian postal address ready. Your TFN is mailed to the address you give, so use somewhere you'll be in a month, like your employer's office or a friend's place if you're still in temporary housing [1].
3. Fill in the online form with your passport details. There's no fee and no documents to mail in [1].
4. Save your receipt number. If nothing arrives in 28 days, contact the ATO with it, and don't apply twice [1].
5. Give your TFN to your employer on a TFN declaration as soon as it arrives.

If you're on a visa without work rights, or you're applying from outside Australia, there's a separate paper form [1].

myGov and the ATO

myGov is the Australian government's online login hub. You'll use it for the ATO, for Medicare if you ever become eligible, and for Services Australia. Setting it up is a bit like creating your Login.gov account back home, but you'll actually use it every year.

Once you have a TFN:

1. Create a myGov account.
2. Link the ATO to it. You'll answer some identity questions, so keep your TFN letter and a recent pay slip handy.
3. Check your income statements. Employers report your pay to the ATO through Single Touch Payroll, so your income statement shows up in ATO online services after June 30.

Lodging your Australian return

"Lodge" is the Australian word for filing. Here's how the timing compares with home.

Most Americans with straightforward wage income can use myTax. Much of it is prefilled from employer, bank and health insurer data [2]. If you're using a tax agent, the ATO says you need to engage them before October 31, and your payment due date may then be later [2]. You can check an agent's registration on the Tax Practitioners Board's public register.

The mismatched tax years are the headache. Your US return covers the calendar year, so you'll split Australian income across two Australian tax years when you report it to the IRS, and convert it to dollars. Keep your pay slips and income statements from both years.

The Medicare levy

Australian tax residents generally pay a Medicare levy of 2% of taxable income on top of income tax [3]. It helps fund Australia's public health system.

Here's the catch for Americans: most of you on temporary visas aren't entitled to Medicare, because the US has no reciprocal health care agreement with Australia. Paying for a system you can't use would sting, so the ATO has exemption categories [3]:

1. Medical: certain blind pensioners and people entitled to full free treatment.
2. Foreign residents: people who are foreign residents for tax purposes [7].
3. Not entitled to Medicare benefits: people who were temporary residents for Medicare purposes and hold a Medicare Entitlement Statement [4].

Many Americans who move to Sydney for a job of a year or more become Australian tax residents, so category 3 is the one that usually applies.

Getting a Medicare Entitlement Statement

The Medicare Entitlement Statement (MES) is issued by Services Australia and shows the period when you weren't entitled to Medicare [4].

1. Apply through myGov from July 1, once the tax year has ended [4].
2. Wait for it. Processing can take up to eight weeks, so apply early in July if you want to lodge well before October 31 [4].
3. Claim the exemption in the Medicare levy section of your return. In myTax, you enter the number of days you qualify for the full 2% exemption and confirm you hold an MES [4].
4. Repeat every year you're not entitled to Medicare.

Two cautions. An MES doesn't guarantee the exemption; the ATO still checks [4]. And your dependents count: if your spouse is entitled to Medicare, for example because they're Australian, you generally can't claim the full exemption [4].

The Medicare levy surcharge

The surcharge is separate from the levy. It's designed to push higher earners into private hospital cover. For 2025–26, the thresholds are [5]:

For 2026–27, the base thresholds rise to AUD 105,000 for singles and AUD 210,000 for families [5]. Family thresholds go up by AUD 1,500 for each child after the first [5].

You avoid the surcharge if you and all your dependents either hold an appropriate level of Australian private hospital cover or fall into a Medicare levy exemption category [6]. Appropriate cover means hospital cover from a registered Australian insurer, with an excess of AUD 750 or less for a single policy (about USD 530) or AUD 1,500 or less for others (about USD 1,060) [6]. Overseas Visitors Health Cover and Overseas Student Health Cover don't count as that kind of cover [8], so an exemption category is what usually protects Americans on temporary visas.

When you get permanent residence and enroll in Medicare, the exemption ends. If you earn above the threshold, buy Australian hospital cover right away.

If your partner is Australian, our sister site ExpatCooee explains whether Australians stay tax residents after moving abroad, which matters if you're planning a future move to the States together.

The US side

Your Australian return doesn't replace your US one. Uncle Sam still wants Form 1040 every year, and you'll usually claim either the foreign earned income exclusion or foreign tax credits for Australian income tax. The Medicare levy is generally treated as an income tax for credit purposes, but ask a US expat tax preparer to check how it fits your return. Your Australian bank accounts and super fund also go on your FBAR if the combined balance tops USD 10,000.

TFN delays and MES timing come up every July in our community group for Americans in Australia, so you won't be the only one asking.

Sources

1. TFN application for foreign passport holders, permanent migrants and temporary visitors, Australian Taxation Office
2. Time is running out to lodge your own tax return, Australian Taxation Office
3. M1 Medicare levy reduction or exemption 2026, Australian Taxation Office
4. Medicare levy exemption: not entitled to Medicare benefits, Australian Taxation Office
5. Medicare levy surcharge income, thresholds and rates, Australian Taxation Office
6. M2 Medicare levy surcharge 2026, individual tax return instructions, Australian Taxation Office
7. Foreign residents Medicare levy exemption, Australian Taxation Office
8. Medicare levy surcharge, privatehealth.gov.au (Commonwealth Ombudsman)

Keep reading

• Australian taxes for Americans: how they fit with your US return
• Medicare in Australia: why Americans aren't covered
• Superannuation and US tax
• Foreign earned income exclusion vs foreign tax credit