Working and Living in a Remote Zone Tax Offset
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Zone Tax Offset and the 2015 Budget, Zone Rebate Fly in Fly out

The Zone Tax Offset (ZTO) and the 2015 budget refer to Australian tax legislation and policy. The Zone Tax Offset is a tax rebate for individuals who live and work in specified remote or isolated areas of Australia, known as “zone areas.” The 2015 budget included changes to the eligibility criteria for the Zone Tax Offset.

Fly-in Fly-out (FIFO) refers to a work arrangement where employees live in one location and travel to another location for work, then return home after their work is completed. For those FIFO workers whose normal residence is in one zone, but who work in a different zone, they will retain the ZTO entitlement associated with their normal place of residence.

In the May 2015 Federal Budget, the following announcement was made.

In this Budget, we are amending the Zone Tax Offset so that it is only available to those who have genuinely moved to specified remote areas, saving $110 million.

Budget measures, budget paper no. 2: 2015–16, op. cit.

How much do you get as an offset living in the zone

The amount of Zone Tax Offset that an individual can claim depends on various factors, including their taxable income, their residency or work status in a zone area, and the specific zone in which they reside and work.

As of 2022, the maximum Zone Tax Offset available for individuals is $338 for those living in a “zone A” area, $57 for those living in a “zone B” area, and $1173 for those living in a “special area.”

How long do you need to live in the zone to qualify?

To qualify for the Zone Tax Offset, an individual must reside and work in a specified remote or isolated area of Australia, known as a “zone area,” for at least 183 days in an income year. This means that an individual must live in a zone area for 183 days and work in a zone area for 183 days in order to meet the eligibility criteria.

It’s important to note that the 183-day requirement must be met in a single income year, which is the period from July 1 to June 30 in Australia. The number of days that an individual has resided and worked in a zone area in previous years does not count towards the 183-day requirement.

The 183 days can span over two financial years, the total of the days you lived there in the first year and the current income year is 183 days or more and the financial year the claim is made you must have lived in a zone in the current income year includes the first day of the income year.

Example: unable to claim the zone tax offset – no residence in a prescribed zone

Levi is an engineer who lives in Adelaide. He flies to Alice Springs for 12-day shifts at an engineering firm and then travels back to Adelaide for his days off (which vary between four and eight days in a row).

Levi doesn’t have his usual place of residence within a prescribed zone, even though he is in Alice Springs for 183 days or more. This means he is unable to claim the zone tax offset.

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