An important factor controlling catchment‐scale water balance is the seasonal variation of climate. The aim of this study is to investigate the effect of the seasonal distributions of water and energy, and their interactions with the soil moisture store, on mean annual water balance in Australia at catchment scales using a stochastic model of soil moisture balance with seasonally varying forcing. The rainfall regime at 262 catchments around Australia was modeled as a Poisson process with the mean storm arrival rate and the mean storm depth varying throughout the year as cosine curves with annual periods. The soil moisture dynamics were represented by use of a single, finite water store having infinite infiltration capacity, and the potential evapotranspiration rate was modeled as an annual cosine curve. The mean annual water budget was calculated numerically using a Monte Carlo simulation. The model predicted that for a given level of climatic aridity the ratio of mean annual evapotranspiration to rainfall was larger where the potential evapotranspiration and rainfall were in phase, that is, in summer‐dominant rainfall catchments, than where they were out of phase. The observed mean annual evapotranspiration ratios have opposite results. As a result, estimates of mean annual evapotranspiration from the model compared poorly with observational data. Because the inclusion of seasonally varying forcing alone was not sufficient to explain variability in the mean annual water balance, other catchment properties may play a role. Further analysis showed that the water balance was highly sensitive to the catchment‐scale soil moisture capacity. Calibrations of this parameter indicated that infiltration‐excess runoff might be an important process, especially for the summer‐dominant rainfall catchments; most similar studies have shown that modeling of infiltration‐excess runoff is not required at the mean annual timescale.