Working Holiday Makers (Backpackers) Taxes

From 1 January 2017 working holiday makers are subject to special tax rates.

By definition, working holiday makers are the holders visa subclasses 417 and 462 which are both temporary visas under the immigration rules.

Prior to 1 January 2017 WHMs were taxed according to the residency rules and the respective tax scales.

Departing superannuation payments are also taxed, increased to 65% from 1 July 2017. See Departing Australia tax on superannuation payments

The Tax Office has detailed rules and tax obligations for working holiday makers here.

Legal Challenge to Backpacker Tax

[4 December 2018] An international tax return firm is challenging Australia’s backpacker tax in the Federal Court.

The reported basis of the challenge is that the taxes, which discriminate against backpackers, are a breach of Australia’s international agreements with countries such as Germany, US and the U.K.

Backpackers are taxed without the benefit of a tax-free threshold, at a flat rate of 15% up to (currently) $37,000.

If the challenge is successful, backpackers who have already paid tax at the working holiday maker higher rate could be entitled to a refund.

See news report: International legal action against the Federal Government’s backpacker tax

Working Holiday Makers’ Tax Rates

Working holiday makers are taxed on a progressive tax scale without the benefit of a tax-free threshold.

Budget 2018 proposals set forth a number of adjustments to the tax scales over the tax years beginning 1 July 2018 through to 1 July 2024 and following.

The amended tax tables are set out below.

Working holiday-makers tax rates
2017-18
 Taxable IncomeTax Payable
0 to $37,00015%
$37,001 to $87,000$5,550 plus 32.5% of income $37,000
$87,001 to $180,000$21,800 plus 37% of income over $87,000
$180,000 and over$56,210 plus 45% of income over $180,000

 

Working holiday-makers tax rates
2018-19, 2019-20, 2020-21 and 2021-22
 Taxable IncomeTax Payable
0 to $37,00015%
$37,001 to $90,000$5,550 plus 32.5% of income $37,000
$90,001 to $180,000$22,775 plus 37% of income over $90,000
$180,000 and over$56,075 plus 45% of income over $180,000

 

Working holiday-makers tax rates
2022-23 and 2023-24
 Taxable IncomeTax Payable
0 to $41,00015%
$41,001 to $120,000$6,150 plus 32.5% of income $41,000
$120,001 to $180,000$31,825 plus 37% of income over $120,000
$180,000 and over$54,025 plus 45% of income over $180,000

 

Working holiday-makers tax rates
2024-25 and later income years
 Taxable IncomeTax Payable
0 to $41,00015%
$41,001 to $200,000$6,150 plus 32.5% of income $41,000
$120,001 to $180,000$31,825 plus 37% of income over $120,000
$200,000 and over$57,825 plus 45% of income over $180,000

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This page was last modified 2018-06-21