Australia Working Holiday Visa
Calling all the backpackers out there who work while discovering Australia or the so-called lucky country as famous Donald Horne described it in 1964. While many perceived his statement as criticism of the nation whose richness derived from the access of the British rather than the country’s own beauty, Australia today reaches a well-supported top twenty country ranking. According to the Australian Bureau of Statistics (2018), Australia is the second wealthiest country after Switzerland winning its 27th consecutive year of annual economic growth since post-WWII. Official facts like these in conjunction with what Australia has to offer “naturally”, make of this multicultural continent the favourite work destination for many backpackers. However, a working holiday does not mean tax holiday, therefore, if you’re willing to work while holidaying here then taxes still apply!
Australia Working Holiday Visa – Get Your TFN Sorted
The Australian Taxation Office (2018) suggests keeping in mind your Tax File Number, your Working Holiday Visa type, and the total yearly income that you’re set to receive. If you’re new, sort your tax file number (TFN) out and hand it to your employer. https://www.ato.gov.au/forms/tfn-declaration/. The tax file number identifies you for tax and super purposes, therefore nothing can commence without it.
Australia Working Holiday Visa- Which One Are You On?
Also, be clear with the type of visa you possess, be it a working holiday sub class 417 or work and holiday 462 – they are distinctive from a tax return point of view too. In January 2017, the ATO announced that if your first income equates to $37,000, then 15% of it goes under tax. However, this applies if your employer registers with the taxation office. Hence, if you’re on a 417 Working Holiday and earn $700 in your first week, then you have $105 tax withheld.
Australia Working Holiday Visa- Tax Rate
On the other hand, if your employer is not affiliated with the ATO, then your tax deduction falls under the foreign resident tax rates category, which starts at 32.5%. Therefore, if you earn $700 a week then $227.5 tax is withheld. The Australian income year-ends on the 30th of June each year and you’re required to lodge an income tax return only if your yearly income exceeds the $37,000. The ATO then works how much you should pay or they should pay you, depending on how much tax was withheld. You should however receive a payment summary when you finish work showing your income and the amount of taxes withheld.
While, our accounting team at Online Tax Return hopes you’re enjoying the lucky country, we’d like to encourage you to dig in a bit deeper if in doubt of your regulations as a working holiday maker 😊 If in doubt, you can always contact us for more information and we’ll be more than happy to answer any questions.