Dubai salary tax for Australians: what the UAE charges and what Australia still taxes
The UAE does not tax salaries. The UAE government portal states: “The UAE does not levy income tax on individuals.” Your Dubai employer pays you without deducting income tax.
Australia decides the rest. If you remain an Australian tax resident, your Dubai salary goes into your Australian tax return. Once you become a foreign resident for Australian tax, Australia stops taxing your foreign income but keeps taxing income that comes from Australia, such as rent.
This guide is general information as at October 2026, from u.ae and ato.gov.au. It is not personal tax advice. Your residency position and income need a registered tax agent’s eyes before you rely on any of it.
Dubai salary tax: is there income tax in the UAE?
No. The UAE charges no income tax on individuals, so your employment income reaches you without income tax taken out.
The UAE does have other taxes. The same government page confirms a 5% value added tax on goods and services, so you pay VAT on what you buy. The UAE also charges corporate tax on business profits, which matters if you run your own company there. Our guide to setting up a UAE company from Australia covers that.
When you compare a Dubai offer with an Australian one, read the structure of the package as well as the headline figure. UAE packages often split pay into basic salary plus housing and transport allowances. The UAE government says expatriate workers have no pension scheme and receive an end-of-service gratuity calculated on their last basic salary instead, so a low basic salary means a smaller gratuity. See the u.ae page on pension schemes for expatriate workers.
Do I pay Australian tax on my Dubai salary?
That turns on one question: are you still an Australian tax resident while you earn it?
The ATO decides residency with the resides test and three statutory tests, and it looks at your whole life: where your family lives, what happens to your home, how long you plan to stay away, and the ties you keep. A UAE visa and a Dubai lease help show you have moved, but the ATO does not treat them as decisive. Our guide Am I still an Australian tax resident after I move to Dubai? explains the tests and the ties that keep people resident.
The answer puts you in one of two positions.
If you stay an Australian tax resident
You declare your Dubai salary in your Australian return. The ATO’s page on living overseas and remaining an Australian tax resident says that if you work while living overseas you must declare “all your foreign employment income”.
Australian residents reduce the Australian tax on foreign income with the foreign income tax offset, which credits tax paid in the other country. The UAE charges no income tax on your salary, so you have nothing to credit. In practice, an Australian resident working in Dubai can owe Australian tax on the whole Dubai salary at resident rates.
Section 23AG exempts some foreign employment income, but it will not help most people in Dubai. The ATO’s 23AG steps limit it to specific work, such as delivering Australian official development assistance or deployment overseas with an Australian disciplined force, for 91 days or more of continuous foreign service. The exemption also falls away where the other country does not tax your employment income, which describes the UAE, unless one of a few additional reasons applies. Ask a registered tax agent to check before you rely on it.
Remaining resident also keeps you inside the Medicare levy surcharge rules. The ATO says that if you cancel private hospital cover while you live overseas, you may owe the surcharge if your income is above the threshold, and exempt foreign employment income still counts towards that income test.
If you become a foreign resident
Once you stop being an Australian tax resident, you no longer include foreign-sourced income, including your Dubai salary, in an Australian return. The ATO’s page on foreign resident income says you “generally don’t need to declare income you receive from outside Australia”. This is the outcome most Australians moving to Dubai plan for, and the reason the date you stop being a resident matters so much.
Australia still taxes your Australian-sourced income. For most people that means rent from a property they keep, or income from an Australian business. The ATO’s foreign resident tax rates for 2025-26 are:
| Taxable income | Tax on this income |
|---|---|
| $0 to $135,000 | 30c for each $1 |
| $135,001 to $190,000 | $40,500 plus 37c for each $1 over $135,000 |
| $190,001 and over | $60,850 plus 45c for each $1 over $190,000 |
Foreign residents get no tax-free threshold and do not pay the Medicare levy. If you have $30,000 of taxable Australian rental income after expenses, the 2025-26 table gives tax of $9,000. The table on the ATO page, last updated on 1 June 2026, ran to 2025-26 when we checked, so ask your tax agent for the rates for the year you are in.
Investment income has its own rules:
- Bank interest. Banks withhold 10% if they have your overseas address, and 47% if they do not. You do not include that interest in your Australian return. See the ATO’s page on bank accounts held by foreign residents.
- Unfranked dividends. Companies withhold 30%. Residents of countries with a tax treaty can get a lower rate, but Australia has no tax treaty with the UAE. The UAE is missing from the Treasury list of Australia’s income tax treaties.
What happens in the year I move to Dubai?
You are a part-year resident. Your return covers your worldwide income up to the date you stop being a resident, including any Dubai salary paid before that date, and Australian income after it. You get a reduced tax-free threshold and pay resident rates for the year. Leaving can also trigger a deemed disposal of your shares and other assets for capital gains tax.
Our guide Leaving Australia for tax: the ATO residency tests and your final tax return works through that year step by step.
Do I still repay my HELP debt from a Dubai salary?
Yes. The ATO’s page on overseas repayments says you must submit an overseas travel notification within 7 days of leaving if you intend to live overseas for 183 days or more in any 12 months. You then report your worldwide income by 31 October each year, or lodge a non-lodgment advice. If your worldwide income is above the minimum repayment threshold, you make compulsory repayments or pay an overseas levy. A tax-free salary in Dubai still counts as worldwide income.
Your checklist before you take a Dubai salary
- Get your residency position settled before you start work. A registered tax agent can tell you whether your plans are likely to end your Australian residency and from which date.
- Match your facts to that position. If you mean to stop being a resident, a UAE residence visa, a Dubai home and your family with you all support it. A house left empty for your return, your children in an Australian school and frequent long trips home point the other way.
- Tell your banks and brokers you are a foreign resident, and give them your Dubai address.
- Plan for the Australian income you keep. Rent, dividends and business income stay in the Australian system, without a tax-free threshold.
- Check your contract. Look at the split between basic salary and allowances, because your gratuity follows the basic figure.
- Keep records of your travel dates, your UAE visa and Emirates ID, and your Dubai lease. They are your evidence if the ATO asks. RezTally, our own app, keeps the travel part as a dated log you can export.
How we help
We look after the UAE side: your residence visa, your family’s visas, your Emirates ID, your tenancy and your bank account, so the facts on the ground match the plan you agree with your Australian tax agent. See how we handle UAE residence visas for you and your family. Alan replies within one working day.
Questions people ask
Is there income tax on salaries in Dubai?
No. The UAE government states that the UAE does not levy income tax on individuals. Your employer pays your salary without income tax deducted. You still pay 5% VAT on goods and services you buy.
Do I pay Australian tax on my Dubai salary?
Only if you are still an Australian tax resident when you earn it. Australian residents must declare all their foreign employment income. Once you stop being a resident, you no longer include foreign-sourced income in an Australian return.
Can I claim a foreign income tax offset for my Dubai salary?
The offset gives you credit for foreign income tax you have paid. The UAE does not tax salaries, so there is no UAE income tax to credit against Australian tax on the same income.
What Australian income is still taxed after I move to Dubai?
Australian-sourced income, such as rent from an Australian property. As a foreign resident you pay tax on it from the first dollar, at foreign resident rates, and no Medicare levy. Banks withhold 10% from interest if they have your overseas address, and companies withhold 30% from unfranked dividends.
Does Australia have a tax treaty with the UAE?
No. The UAE does not appear on the Treasury list of Australia's income tax treaties, so treaty tie-breakers and reduced treaty withholding rates do not apply.
Do I still repay my HELP debt from a Dubai salary?
Yes, if your worldwide income is above the repayment threshold. The ATO requires you to submit an overseas travel notification within 7 days of leaving and to report your worldwide income each year.