Backpacker tax rates


As of 1st January 2017, resident tax rates will no longer be available for certain working holiday makers.

For temporary residents on either 417 or 462, tax rates will increase to 15% on the first $37,000 with ordinary rates applying thereafter (this will depend on their tax residency status) .

In addition to increased tax rates, super will also be taxed at a higher rate upon withdrawal.

Departing Australia Superannuation Payment’s will now be taxed at 65% after  1st July 2017.

One overlooked factor in regards to backpackers is whether or not they are classified as a resident or foreign resident for tax purposes.

Generally speaking, persons migrating to Australia with the view to settle permanently are considered as tax residents as well as persons who reside in Australia for more than 6 months of the financial year.

The following scenarios can also assist with residency status:

  • Australians leaving the country and failing to set up a permanent home in another country are generally considered Australian tax residents.
  • Overseas students who undertake Australian studies which are greater than 6 months in duration are Australia tax residents.
  • Foreigners undertaking the necessary steps in order to make Australia their home will be classified as residents.
  • Temporary visitors (less than 6 months stay) who travel/work at various places around Australia are generally considered foreign residents.
  • Persons leaving Australia permanently will be treated as foreign residents for tax purposes.

Should you be unsure of your residency for tax purposes, feel free to contact your local accountant for clarification.

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