(TL;DR complete our tax calculator to work out your refund)
Here are some real world examples to help increase the refund on your backpacker tax return.
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The thorny issue of the tax return for backpackers has been much-maligned for sometime. Changes made by the Australian government mean that it’s now more difficult for working holiday visa holders to get a tax refund.
On 1 January 2017, the “backpacker tax” was introduced in Australia. Before then, the first $18,200 earned by working holiday visa holders was tax-free. This would mean that backpackers would welcome a hefty tax refund come the end of the financial year.
Since then, backpackers are taxed at 15% from the very first dollar earned, up to $37,000. The tax rate then increases to 32.5% for any earnings over $37,000.
Huff! Not fair, eh?
But it’s not all bad news. There are legitimate ways to increase your chances of getting a refund. You just need to know what work-related expenses you can claim as tax deductions to reduce the amount of tax you’ll pay.
The top 7 potential tax deductions for your working holiday visa tax return
If you have the any of the following expenses, you can claim them to either get a tax refund, or at the very least, to reduce the amount of tax that you’ll pay. They all add up, so make sure you claim everything that you’re legally entitled to.
1. The cost of any courses related to your job.
For example, RSA (Responsible Service of Alcohol) and RSG (Responsible Service of Gambling) courses, or a White Card course needed for labourers in the construction industry.
2. The cost of buying and cleaning any compulsory uniforms or protective clothing that you need for your job.
A compulsory uniform is one that’s specific to your job or your employer. But it’s important to note that you can’t claim the cost of buying or cleaning ordinary clothes that you wear to work.
Protective clothing could include gloves, steel-capped boots, safety-coloured vests, or anything to protect you from the sun (like hats for fruit pickers).
3. Work-related car expenses
If you use your own car for work purposes (like deliveries or for carrying tools that you need), you can claim running costs like petrol or road and bridge tolls. How much you can claim depends on factors like the size of the engine in your car.
You need to keep records of the number of kilometres you’ve travelled for work, but it’s important to note that you can’t claim for the cost of any travel between your home and where your work. That’s considered to be private travel and is not a tax-deductible expense.
4. The cost of work-related tools or equipment
If you need to buy your own work-related tools or equipment to do your job, you can claim the associated costs. This includes any protective equipment like sunglasses or sunscreen if you’re working outdoors.
5. The cost of any work-related phone calls or Internet use
If you use your phone or computer for work, you can claim a deduction for the proportion of the costs that relate to work use.
You can claim a tax deduction for any donations over $2 that you’ve made to any registered Australian charities or causes like bushfire and drought appeals. But it must be a genuine donation. You can’t claim a tax deduction if you receive anything in return (even if it’s only a ticket in a raffle).
7. Tax agent fees
If you use a tax agent to prepare and lodge your tax return, their fee is tax-deductible. That can also be a smart way to make sure you get any refund that you’re entitled to. After all, they prepare tax returns for a living and they know what to claim.
Before you claim any tax-deductible expenses…
1. Make sure you have receipts.
You need to have receipts as backup evidence for any expense claims that you make.
2. Make sure you weren’t reimbursed by your employer for any of your work-related expenses.
If you’re employer has reimbursed you for any work-related expenses, you can’t claim them as a deduction on your tax return. Check your pay slips to make sure they haven’t.
3. Check out our backpacker tax calculator to see what you are eligible for.
Our backpacker tax calculator takes a few minutes and will quickly let you know how big your tax refund could be.