Working Holiday Visa Tax Information
Backpackers are young people between the ages of 18 and 30, visiting Australia for a combination of tourism and work.
There are two main subclasses of working holiday visas, that The Federal Government issues for backpackers:
- WHV 417 (Belgium, Canada, Cyprus, Denmark, Estonia, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Korea, Malta, Netherlands, Norway, Sweden, Taiwan, UK).
- Subclass 462 (Argentina, Bangladesh, Chile, Indonesia, Malaysia, Thailand, Turkey, USA, Uruguay).
Both these visas entitle you to:
- Stay in Australia up to 12 months
- Work in Oz for up to 6 months with each employer
- Study for up to 4 months
- Leave and re-enter Australia while your visa is valid
If you’re granted a 417 or 462 visa and you do three months specified work during your first year, you can apply for a 2nd year working holiday visa. Furthermore, complete 6 months of specified work during your second year and be eligible for a third year extension.
Are backpackers "residents for tax purposes"?
Most backpackers are generally considered non-residents for tax purposes, but you can complete a short residency questionnaire with Taxback.com, to figure out your residency status for tax purposes correctly.
Backpackers on 417 and 462 Visas are not able to use the tax-free threshold of $18,200 unlike Australian residents.
However, factors such as how long you’ve been in the country and your behaviour while you’re in Australia can influence whether you will be seen as a resident in the future.
For example, if you come on a backpacker Visa from one of these 8 countries (Chile, Finland, Germany, Israel, Japan, Norway, Turkey, United Kingdom) and you are staying in Australia for longer than six months, live in the same place and establish ties with the local community, then you’ll likely be considered an Australian resident for tax purposes. This means that you may be able to claim the majority of tax withheld at source by your Australian employers after the end of the financial year (30 June).
Do backpackers have to lodge an Australian tax return?
You’re recommended to lodge an Australian tax return if you’ve paid tax of any kind during your stay, even on a working holiday visa or as a foreign resident.
You need to lodge an Australian tax return if:
- You earned more than AU$ 45,000 in the financial year
- You are an Australian resident and your taxable income was above the tax exemption threshold
- You have sourced income under ABN and worked as a self-employed individual
However, you will not necessarily have to file an Australian tax return if your earnings are below $45,000.
That said, it’s important to have a clean tax record while in Australia as a backpacker.
This is particularly true if you would like to apply for a second Australian visa and extend your time down under.
The Australian financial year runs from 1 July to 30 June, and because you have to submit a tax return every year, you may have to submit more than one if you are present in Australia for longer than one tax year.
If you’re a foreign resident and will no longer receive Australian-sourced income (i.e. if you’ve left your job and aren’t due to receive any outstanding salary before the end of the tax year), you may able to lodge your tax return early if you’re leaving Australia permanently.
Working Holiday Visa Tax Rate
What is the tax rate for working holiday visa holders in Australia?
Working holidaymakers in Australia are charged a tax rate of 15% on their earnings, up to $45,000. They are then charged marginal rates of tax on any income earned over $45,000.
|$0 - $45,000||15%|
|$45,001 - $120,000||$6,750 plus 32.5 cents per $1 on income over $45,000|
|$120,001 - $180,000||$31,125 plus 37 cents per $1 on income over $120,000|
|$180,001 and over||$53,325 plus 45 cents per $1 on income over $180,000|
Claiming a tax refund
What expenses are tax deductible?
You can minimize your tax liability or increase the value of your tax refund by claiming tax back on your work-related expenses when completing your tax return. Work related expenses vary from person to person as they are specific to your core occupation – so what expenses you can claim really depends on what your job was in Australia. You can claim on expenses such as the cost of your uniform, self-education courses, tools etc. It’s important to retain all your receipts for work expenses so you have proof for the Australian Tax Office.
Even if you're not eligible for an income tax refund due to the length of your stay or nature of your visa, you should still be eligible to claim a superannuation refund. As a working holidaymaker, any departing Australia super payment made on or after 1 July 2017 is taxed at 65%.
Superannuation is a percentage of your salary put aside for the purposes of a retirement fund, but if you’re not staying in Australia until retirement you’re entitled to a refund of your superannuation fund!
You can apply for your superannuation as soon as you depart Australia permanently and your visa has expired.
If you've just arrived in Australia, we can help you open a super account.
Taxback.com offers professional tax refund services in Australia. They have filed over 35,000 Australian tax returns since 2002. They are a registered tax agent. Tax agent number 72087002