Working Holiday Makers are taxed at 15% for the first $37,000AUD of your income. The remainder of your earnings are taxed at ordinary rates.
You are subject to this rate if you have a visa subclass of either:
- 417 (Working Holiday)
- 462 (Work and Holiday)
While you work in in Australia, tax will be automatically withheld from your pay. You will still be required to lodge a tax return each financial year.
When you lodge an income tax return, the ATO (Australian Tax Office) will work out how much tax you should have paid. If you paid too much, they would give you a refund. If you have not paid enough, they will send you a bill.
Tax file number declaration
Registered employers of working holiday makers will withhold tax from your pay at 15% on the first $37,000 of income.
If you work for an unregistered employer, they must withhold tax from your pay using foreign resident tax rates. Foreign resident tax rates apply a rate of 32.5% to the first $37,000 of income.
Labour hire arrangements
Some working holiday travellers are recruited in construction / harvesting industries under labour hire arrangements. In these instances, the labour hire firm contracts with the worker and pays the worker. The worker is not an employee of the client and there is no contract between the worker and the client. The worker may or may not be an employee of the labour hire firm.
Under a labour hire arrangement, the labour hire firm will be required to withhold amounts from a payment made to the worker (at the normal salary and wages rates) and provide the worker with a PAYG payment summary – business and personal services - following the end of the financial year.
Lodging a tax return
The Australian tax system runs from 1 July to 30 June. You are required to lodge a tax return to make sure you have paid the right amount of tax.
If you leave Australia permanently, you can lodge your tax return early.
When you lodge a tax return, the ATO work out how much tax you should have paid based on your actual income for the year. If too much was withheld from your pay, you may receive a refund of the difference. If you have not paid enough, the ATO will send you a bill.
To Lodge your Tax return, we recommend using Taxback.com.
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Superannuation
As a working holiday maker your employer also has to pay super for you if you are eligible. When you leave Australia, you can apply to have your super paid to you as a Departing Australia Superannuation Payment (DASP). The tax on any DASP made to working holiday makers on or after 1 July 2017 is 65%.
Departing Australia Superannuation Payments
Employers are required to make super contributions on behalf of their employees to fund retirement.
If you worked and earned super while visiting Australia on a temporary visa, you can apply to have this money paid to you as a Departing Australia Superannuation Payment (DASP).
As a working holiday maker, any departing Australia super payment made on or after 1 July 2017 is taxed at 65%.