Navigating Visa Tax Deductions When Hiring Foreign Employees

We are seeing more clients sourcing workers from overseas, as Australia faces a skills shortage (or perhaps an abundance of apathy)

Hiring foreign employees can bring a wealth of benefits to your business, but it also involves navigating a complex web of tax regulations and visa requirements

Understanding Visa Tax Deductions

When hiring foreign employees, employers may incur various expenses related to visa applications and processing.. The Australian Taxation Office (ATO) only allows certain visa-related expenses to be deducted as business expenses

Whether costs are deductible also depends on whether the person is already in Australia, or you are hiring them direct from overseas

Deductible

• SAF levy (Skilling Australians Fund):  imposed on the employer for sponsoring a skilled worker from overseas
• Visa application fees: fees paid for the processing of work visas, such as the Temporary Skill Shortage (TSS) visa (subclass 482)
• Legal and consultancy fees: expenses incurred for legal advice or services from immigration consultants related to the visa application
• Relocation costs: including travel expenses and temporary accommodation, may be deductible.  This does not apply when hiring a foreign employee who is already in Australia during the visa application process
• Recruitment costs: expenses related to recruiting foreign employees, such as advertising and agency fees

Non-Deductible

• Personal expenses: such as the cost of obtaining medical checks for the visa applicant
• Family relocation costs: generally not deductible unless they form part of the employment agreement.

Navigating the complexities of visa tax deductions may seem daunting, but with the right knowledge and professional support, you can turn it into a valuable opportunity for your business.

Authored by Christine Kee