Understanding Australian Backpacker Work and Holiday Tax in 2023
Australia has got a reputation in the backpacking world for its culture, scenery and people. Holiday labor is also pretty integral to many of our farms and other seasonal industries….
Australia has got a reputation in the backpacking world for its culture, scenery and people. Holiday labor is also pretty integral to many of our farms and other seasonal industries. Unfortunately, holiday backpackers are not exempt from tax, which can become quite convoluted depending on your situation. Learn more on backpacker tax (work and holiday tax) from BTMH’s accounting & taxation specialists.
Who Is Impacted by Backpacker Tax?
The Australian ‘Backpacker Tax’ applies to two visa classes: the 417 ‘Working Holiday’ and the 462 ‘Work and Holiday’ visas. These people are classified as Working Holiday Makers. Tax and superannuation are usually taken by your employer in the form of PAYG. If your employer is a registered Working Holiday Maker Employer, you are taxed at 15% on the first $45,000 you earn, then on the foreign resident scale – 30% from $45,001 to $135,000, 37% to $190,000 and 45% above that. If they are not registered, the foreign resident rates apply to everything you earn, starting at 30% from the first dollar with no tax-free threshold.
Your Residency Status
Some Working Holiday Makers may be eligible for the same tax rate as Australian residents. This depends on two things; your consideration as an Australian resident for tax purposes and your country of origin.
Residents for tax purposes are those who can clearly show that they plan on living in Australia for an extended period of time or who have stayed in Australia for more than 183 days in the income tax year. You can prove your status as a resident for tax purposes by taking the Resides Test. As well as proving your residency, only Working Holiday Makers from specific countries can claim eligibility for this lowered tax rate. Referred to as NDA countries, these countries have signed a non-discriminate-article with Australia. These include Chile, England, Norway and Japan.
What About Your Super?
Super is paid by your employer on top of your wages, at 12% of your earnings – it does not come out of your pay. Since 1 July 2026 it has to reach your fund within seven business days of each payday rather than once a quarter, so it is worth checking your fund balance against your payslips while you are still here. You can claim it after leaving Australia, if you do not intend to work here again, by lodging a DASP application.
How Can We Help?
Our team has extensive experience in helping Working Holiday Makers sort out their tax – it is what our tax for travellers service is for, from getting you a TFN when you arrive to finalising things after you leave. We can help with explanations, DASP applications and finalising your tax affairs before leaving the country. We also help those outside Australia with queries and outstanding tax obligations. You can visit our friendly team of accountants and tax advisors in Bondi Junction or connect with us online. Book your appointment today.