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Finances 101: A guide to money management for expats emigrating to Australia

Updated 7 Feb 2020

Managing your day-to-day finances is a skill you will spend most of your adult life perfecting, but throw another country, another culture and another unique economy into the mix and it can feel like you’re back at the beginning.

If you are moving to Australia, then you do need to get back to the basics with your finances in many ways. The banking system in Oz is set up to reflect and tailor to the individual strengths and weaknesses of the nation’s economy, population, production and place in the world, and knowing the basics of Australian finances will help you open and manage the accounts you need, based on the knowledge you already have.

Organising your finances before you arrive in Australia

Before you start translating your banking knowledge for use in the Australian system, you need to convert the money itself. A simple way to send your money to Australia when you are emigrating is via electronic transfer from your current bank to an Australian bank; however, it’s worth noting that you can lose a significant amount to bank fees and exchange costs using this method.

Instead, consider the services of a specialist foreign exchange company, like OzForex, who will be able to secure you a better exchange rate than most banks. If you do go this route, don’t simply choose the cheapest foreign exchange specialist to make your transfer – look for a reputable company who has been operating for many years and offers you a written quote.

If you’d still rather deal with a bank, you can take the quote you’ve received and ask your bank to match it, as most will want to keep your business.

When transferring money between currencies there is always the danger of the exchange rate moving against you, and if you’re worried your country’s exchange rate is going to get worse against the Australian dollar while you are organising your transfer, look for a company which will allow you to lock in the current rate so you’re protected against any falls. You will usually have to pay a deposit on your transfer to take advantage of the lock in feature.

You can also bring your money to Australia in cash, just remember that if you have more than the equivalent of AU$10,000, you will have to declare the money to customs, although you won’t pay any tax on money you bring in with you.

How to open and use an Australian bank account

To help you choose the savings and transaction accounts you will need when you emigrate to Australia think about the ways you currently access your money and manage your finances. Australian banks and financial institutions have a range of options, and by identifying your needs you can narrow down your choices to the most affordable and suitable product.

The Australian financial institutions sit in a tiered system, with the Big Four Banks at the top:

  • Westpac

  • Commonwealth Bank

  • ANZ National

  • Australia Bank

Second-tier banks are slightly smaller and include:

  • ING Direct

  • AMP

  • HSBC

  • St.George

Some of the financial institutions are part of the same banking group, but operate independently. For example, St.George is owned by the Westpac Banking Group.

In Australia, it’s also possible to deposit your money with a credit union, which operates as a not for profit organisation, owned by the members.

To open an Australian bank account you need:

  • Identification. such as a driver’s license or your passport

  • Proof of an address in Australia

  • In some cases a reference from your old bank

Australian banks require 100 points of identification to open an account, where each form of identification holds a different point value. For example, a birth certificate equals 70 points and a driver’s license is 40 points. However, if you apply for an Australian bank account within six weeks of your arrival, your passport can be valued at the full 100 points.

Many of the bigger Australian banks will help you open an account before you arrive in Australia, to make the application process easier.

You will also want to make sure the Australian bank account you choose has online banking so you have the option to transfer money electronically from your old accounts to your new ones. It’s worth noting that online savings accounts in Australia also offer higher interest rates than standard accounts, and will often be free of monthly and transaction fees.

Australian credit cards

You will need to undergo the same identification checks when applying for any of the Australian credit cards currently available on the market, but this is where your credit history starts to really affect your eligibility.

When you are new to the country you have had little opportunity to establish your credit, so in the weeks and months after you emigrate it can be beneficial if you keep the credit card you used in your country of origin and make sure it is equipped for international transactions. This will give you the time to establish your credit in Australia, and will mean you have access to a credit card if you need one. If you are unsure what your credit score is, Dun and Bradstreet, a business information organisation, will be able to provide you with a copy of your credit report.

Alternatively, your old bank may be one which has a network of branches in Australia, and can therefore provide you with an Australian credit card when you arrive, based on your previous history.

In other cases you can apply for a moving abroad credit card, from providers such as American Express. If you have an eligible American Express credit card, and can provide an Australian address and phone number, you can transfer your card to another country. This will help you establish credit in Australia, after which you can choose a credit card from another bank or financial institution.

You will also find it easier to apply for a credit card if you have a job in Australia, so if you are emigrating for work, or you have already found employment, most banks will be able to secure your credit card application based on your income.

You don’t necessarily have to apply for a credit card either as you can attach a debit card to your Australian transaction account. A debit card looks and acts like a credit card, but accesses the funds you have in your transaction account, so no credit history is required, and you’re not being charged any interest or transaction fees.

Applying for a personal loan in Australia

In most parts of Australia, to get around town or explore your neighbourhood you are going to need a car, and taking out a personal loan can help you buy a reliable, comfortable car which suits your family’s needs.

Unfortunately, a personal loan is an unsecured loan, where there is no secure asset the bank can take possession of if you default on your repayments, and so the loan will have stricter eligibility criteria and a higher interest rate. Due to the increased risk associated with unsecured loans, if you are emigrating to Australia and want to apply for a personal loan, remember that you will have a better chance if you have a high income.

If you have arrived in Australia on a temporary resident visa, the term of the personal loan must not be longer than the amount of time remaining on your visa. As the expiry date of your visa gets closer, lenders will want to see a higher income from applicants as a measure of reducing their risk. You can also provide a cash deposit to the lender to reduce the level of risk associated with your personal loan.

When taking out a personal loan in Australia, it is a good idea to work with a broker, who can assess your eligibility and financial situation and suggest the loan types and the specific lenders who are most likely to approve your application. This is important in preserving your credit history, because if you were to be unsuccessful in a number of personal loan applications, this will be recorded on your credit history and you may be viewed as a bad risk.

Applying for an Australian Home Loan

The Australian property market and home loan market work very differently to those in other parts of the world. So if you are emigrating to Australia, here are the things you need to know about buying your next home:

  • Australian banks are conservative - Compared to the home loan applications process in the US or the UK for example, applying for a home loan in Australia is likely to involve a lot more paperwork, and a much more thorough check of your financial situation. This doesn’t mean you need to worry that you’re being singled out as a risk, it simply means Australian financial institutions are proud of their comparable stability in a financial crisis, and want to keep it that way.

  • Look for a specific immigrant home loan - There are home loans offered by Australian lenders which are specifically tailored to new immigrants. These non-resident loans will allow you to borrow up to 80% of the property’s value, and require you to provide a 20% deposit as security. Although there are some lenders who will allow you to borrow the more standard amount of 95%.

  • Your overseas credit - In most cases, lenders in Australia cannot access the credit histories of immigrants applying for a loan. While this could mean ignoring all of your hard work, or wiping the slate clean, there are eligibility criteria which are more important to an Australian lender. Instead you may be asked to provide evidence of your overseas liabilities and bank accounts so the lender can build a picture of how you manage your money. Also remember that you start to build a credit history as soon as you arrive in Australia so avoid applying for a number of loans or credit cards over a short period.

The eligibility criteria Australian lenders are interested in when you are applying for a home loan include:

  • Your ability to repay the loan - A lender will look at your current income, living expenses and other debts and consider whether you can afford the home loan repayments with your current budget. They will also conduct a stress test on your mortgage to make sure you can still afford the repayments if interest rates were to rise by one or two percent.

  • Loan security - The lender wants to make sure lending you the money to purchase a home is a good risk, and they base this on the value of the property, and the potential sale price they will get if you default on your loan.

  • Your credit history - A lender will look at your credit history in Australia only.

  • Employment and work history - Your lender will look at how stable your employment is based on your position and the industry in which you work. Your work history in both Australia and overseas will be considered.

  • The status of your visa - The type of visa you are on and the conditions of that visa will help determine your eligibility for a home loan in Australia, as the lender wants to make sure you are able to remain in the country to meet your repayments.

  • Assets and liabilities - You will need to provide your lender with details of your assets and liabilities, which will be assessed in relation to your income and your age to determine your net worth, and whether you are in a secure financial position.

The Australian tax system

You don’t have to pay tax on any money you bring into Australia when you emigrate. To start earning an income in Australia you need to apply for a Tax File Number from the Australian Tax Office and you then become a tax resident. You may then have to pay tax on income and capital gains from your investments in Australia, and on any you still have in your country of origin.

The ATO defines a tax resident as any of the following:

  • Someone who has always lived in Australia.

  • Someone who has moved to Australia to live permanently.

  • Someone who has been living in Australia for six continuous months during which they have predominantly been in the same job or lived in the same place.

  • Someone who has been in Australia for more than half of any financial year, unless their usual home is overseas and they do not intend to live in Australia.

As is common to most countries, Australian tax residents are taxed according to how much they earn, on a tiered basis. The more you earn, the more you are taxed.

Individual income tax rates in 2020:

  • You are not taxed for income under $18,200

  • In the $18,201 – $45,000 bracket you are taxed 19 cents for each $1 over $18,200

  • In the $45,001 – $120,000 bracket you are taxed $5,092 plus 32.5 cents for each $1 over $45,000

  • In the $120,001 – $180,000 bracket you are taxed $29,467 plus 37 cents for each $1 over $120,000

  • For $180,001 and over you are taxed $51,667 plus 45 cents for each $1 over $180,000

Expats should find themselves a reputable accountant, or familiarise themselves with all of the deductions you can make to get back some of the tax you’ve paid at the end of the financial year. For example, work uniforms, pens and paper, computers, phones and even donations to charity can be claimed on your tax. You can also arrange for salary sacrifice with your employer who will pay for things such as your car, your family’s childcare costs or a new computer out of your pre-tax income, bringing your taxable income down to a lower bracket.

Australian pensions

Over the years Australian governments have worked hard to implement benefit systems to look after all of us, and as an Australian immigrant, you will be entitled to those benefits too. In some cases you may need to wait up to two years before you can apply for Australian benefits or pensions, some of which include:

  • Family Tax Benefit – This benefit helps families with the cost of raising children and the amount of the benefit is based on your income. Single parents or sole income families can apply for an additional benefit.

  • Maternity payment – A tax-free lump sum amount paid on the birth of your child.

  • Child care benefit – If you use approved child care centres and are eligible under the income test you can receive a benefit towards the cost of child care.

  • Superannuation – Australian employers are obligated to pay 9% of your income into a registered superannuation fund for you to access upon retirement. Your superannuation fund will invest the contributions on your behalf until you reach retirement age and are eligible to access your super as a lump sum, or have it paid as an income to fund your retirement.

  • Government pension – The Australian Government provides pension payments for retirees to cover their standard costs of living. A single pension is $14,615 per year and $24,414 for couples.

If you have already been accumulating a pension fund before emigrating to Australia, you may choose to transfer that pension when you move. There are a number of ways you can do this, depending on the country from which you are transferring your pension. For example, you can take a lump sum payment from your existing pension when you leave to emigrate to Australia.

This money can then help you set up your new life in Australia; however, you may be taxed on this amount when you arrive. It is also important that you seek the help of a financial adviser because if you transfer your pension to a non-approved super fund in Australia you can find yourself paying an even higher tax rate. Also keep in mind that transferring your pension to Australia is much easier than transferring it back to your home country if you choose to repatriate.

In many cases it is impossible to transfer your pension back out of Australia, so you need to consider where you will be retiring before you transfer your pension to Australia. There are numerous superannuation funds you can choose from in Australia, based on your industry, the type of investments you want to make, or the level of risk and return you want to achieve. As a result, you can reap steady returns on your retirement savings, to help you fund the life you’ve always dreamed about.


Emigrating to Australia will be an exciting time, filled with new experiences, new friends and new dreams and goals. With a solid financial foundation built on relevant financial products and the right information, you can make sure you and your family have the best chance of success and happiness in your new home.

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