Working Holiday Tax Return

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Embarking on a working holiday in Australia requires you to know certain pieces of information. Two options in visa subclass can help with your plan. First is the 417, which is known as the Working Holiday. The second one is the 462, which is the Work and Holiday, which is popularly called the “Backpackers.”

Visa Subclass 417

Under the Visa Subclass 417, working holidaymakers are given a temporary visa. This visa entitles you to go on a holiday while working part-time (or even full-time) in Australia. You can fulfill your plans and stay in the country up to a whole year. Aside from this benefit, you can also do the following:

  • Work in Australia up to six months per employer
  • Depart and come back to the country in an unlimited number of times as long as the visa is valid
  • Study in the country up to four months

Visa Subclass 462

As for Visa Subclass 462, it is a visa for work and holidaymakers similar to 417. It also provides the same benefits. However, the difference is that you can get another Work and Holiday visa again. It is applicable for those who have worked in Northern Australia for three months in the following industries:

  • Forestry
  • Fishing
  • Hospitality
  • Agriculture

To know the current status of your visa, you can check it with Visa Entitlement Verification Online.

Tax Rates as a Working Holidaymaker in Australia

One important thing to note about working in Australia is that the tax will be withheld from your pay. It is also necessary that you lodge a tax return every year. Whether you get the visa subclass 462 or 417, you will always be considered a non-resident, which will be used for tax purposes.

Backpackers were once considered as residents in Australia for tax purposes. However, it is no longer the case in the country. Even if you plan to stay more than six months in Perth or any city, it will not matter anymore. Before the change, backpackers were allowed to claim residency even if they only stayed for six months in a single area.

Since January 2017, working holiday makers have been treated as foreign people or residents. Therefore, if you will enter as a backpacker in the country, you can no longer claim the tax-free threshold just like with Australian residents.

Meanwhile, companies that want to employ foreigners should register as employers and apply using a specific form.

Working Holiday Tax Brackets Working Holiday Tax Rates
$0 – $45,000 15c for each $1
$45,001 – $135,000 $6,750 plus 30c for each $1 over $45,000
$135,001 – $190,000 $33,750 plus 37c for each $1 over $135,000
$190,001 and over $54,100 plus 45c for each $1 over $190,000

Your Residency Status and Taxes

A huge factor in how you will be taxed in the country is whether or not you are a resident. Working holidaymakers are not considered residents for tax purposes. There are a few differences when you are a resident or a non-resident. Let us take a look:

backpacker on working holiday

  • Non-residents will have to pay 15% on their first $37,000 income.
  • Meanwhile, residents will not pay on their first $18,200.
  • Once residents reach $18,200 to $37,000, they will be required to pay 19% of that income.

Before non-residents start working, it is important to find a registered employer first. Some employers do not accept working holidaymakers, which is why you need to ensure it first. Registered employers will start charging 15% off your income up to $37,000.

Meanwhile, if you work with a non-registered employer, be aware that the taxes are much higher with them. Non-residents will have to pay 32.5% on the same amount of income. This high percentage should already convince you to work with registered employers only.

At a fiscal point of view, you are considered a resident after you have lived in the same place in the country for six months. It does not mean that you should be in the same address though. As long as it is the same city or area, you are considered a resident. However, you need to prove it.

Declaring yourself as a resident can be quite complex but it can provide you with certain benefits. For one, residents pay less tax than non-residents. The first level of taxation begins at $18,200. Therefore, if you earn less than the mentioned threshold and you have been living in the same city for six months, all taxes will be refunded.

What Else Do You Need to Know?

help working holiday tax return

You may be wondering if you need to worry about Medicare levy as well. Australian residents are deducted 2% from their taxable income for Medicare levy. If you are from Italy, Netherlands, New Zealand, Norway, and certain other countries, you will have to pay the levy. It is due to the reciprocal health agreement of Australia with these countries.

However, as a foreign resident, you are exempted from this charge.

If you get deducted for the levy from your wages, you may need to get an exemption letter so you are entitled to a refund. Finding out that you have been paying for the levy yet you qualify for an exemption can be frustrating. You can get the help you need by starting your online tax return.

Aside from Medicare, you may also want to know about your Tax File Number (TFN). It is your reference number that applies to both tax and superannuation systems. It is your number for life, even though you may change your name or job. The TFN should always be kept securely.

TFNs, unlike what many people may claim, are not entirely necessary. However, you will have to pay more tax if you do not own this number. You cannot apply for government benefits without a TFN. Lodging a tax return online is not possible without your TFN and you cannot get an Australian Business Number (ABN) without it.

You can only get a TFN if you have a valid passport and a registered Australian address. It is the location where your TFN will be delivered. After applying, you will receive the number in 28 days.

How to Claim Your Tax Back from a Working Holiday

Man on working holiday in bar tax

Working holidaymakers in Australia should need to lodge a tax return, which is a requirement for both residents and non-residents. Tax returns are based on the financial year from the first of July to the 30th of June the following year. If you lodge your tax return, you should send it before the 31st of October.

Tax returns should be filed if you earn an Australian income, which denotes the following:

  • Earnings from employment
  • Income for renting out a space or apartment
  • Australian pensions
  • Annuities
  • Capital gains

The income year in Australia ends on 30 June. You should lodge your tax return to ensure you have paid the correct amount of tax. The Australian Tax Office (ATO) calculates your tax based on your income for the year. If you have overpaid, you will receive a refund; if you underpaid, you will need to settle the difference.

Non-residents may find it challenging to complete their tax returns. Assistance can be beneficial, especially since you can ignore income from which withholding taxes have been deducted, such as bank interest. It’s also helpful to lodge your tax return early if you plan to leave Australia before 30 June.

Working Holidays & Superannuation

Working holidaymakers in Australia must also pay superannuation, a retirement fund. To qualify, you need to be over 18 and earn more than $450 monthly before taxes. Employers contribute 9.5% of your earnings to your super fund. Students working in Australia are also required to pay superannuation. Upon leaving the country, you can reclaim your superannuation funds through the Departing Australia Superannuation Payment (DASP) scheme, with an average refund exceeding $1,900.

Your tax refund as a working holidaymaker depends on annual calculations by your employer. At the end of the year, adjustments may be necessary based on the taxes deducted from your paychecks. Your residency status significantly impacts your tax return, and you’ll need to present your final payslips, Group Certificate, PAYGs, or Statement of Earnings, along with your TDN.

The team at can help you claim back tax from your working holiday. Contact them today to start your tax return.

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