close menu

Australia plans to increase tax on working holiday visa holders

by Sam Hopwood | Aug 30, 2016
  • The Australian Federal government has planned to introduce an adjustment to the tax free threshold for non-resident workers. With the commencement originally announced for July 2016, debates between the country’s major political parties has delayed the implementation to January 2017.
  • Australia

    Higher tax rate on all income

    The proposed tax will apply to those working in Australia on 462 and 417 visas. Travellers with these permits will have to pay 32.5% tax on every AUD earned. Previously, income of up to AUD18,000 (£9,500) was untaxed.

    Under the new tax rules, a non-resident in Australia earning AUD40,000 per year could have to pay up to AUD13,000 in tax, leaving them with a net salary of AUD27,000.

    This announcement, made as part of the 2015 National Budget, means that working (non-resident) holidaymakers will pay much higher tax than working (resident) Australians.

    Superannuation funds affected

    This new regulation also impacts the tax temporary residents will need to pay when they exit Australia. When withdrawing their entire pension – known as superannuation – working non-resident Australians will be taxed at between 38 and 47%.

    Contentious decision

    The new tax has been opposed by the farming and tourism industries. They have raised concerns about the impact it may have on an already depleted working holidaymaker workforce.

    The change is expected to impact any businesses and industries that are reliant on seasonal workers.

    Looking beyond the country’s borders, there are also fears that this will damage Australia’s international competitiveness in attracting young travellers. Many believe that the change is likely to cause an increase in the number of unregulated cash payments to seasonal workers.

    Who qualifies for an Australian Working Holiday Visa (417)?

    To qualify for this popular visa, you need to be aged between 18 and 30 and a national of one of the following countries:

    • Belgium
    • Canada
    • Republic of Cyprus
    • Denmark
    • Estonia
    • Finland
    • France
    • Germany
    • Hong Kong Special Administrative Region of the People’s Republic of China (including British National Overseas passport holders)
    • Republic of Ireland
    • Italy
    • Japan
    • Republic of Korea
    • Malta
    • Netherlands
    • Norway
    • Sweden
    • Taiwan
    • United Kingdom

    If you’re keen to explore Australia, our team of Registered Migration Agents are ready to help you with all your visa requirements. Give them a shout on 1800 039 300 or pop them an email.

    • students-graduating
      UK student visas: Here's how you can get one
      Feb 22, 2018  |  by John Dunn
    • students-school-chalk-board
      Get your child into state-funded school in the UK
      Feb 21, 2018  |  by Leanne Shrosbree
    • medical-cross-and-heart
      The NHS vs Medicare: Which is better?
      Jan 30, 2018  |  by 1st Contact
    • big-ben-london-at-night
      What is the cost of living in London in 2018?
      Jan 25, 2018  |  by 1st Contact
    • house-key
      To rent in the UK, you absolutely need to have the right to rent
      Jan 19, 2018  |  by Leanne Shrosbree
    • man-making-more-money
      This is how contractors can take home more cash
      Jan 09, 2018  |  by Kobus Van den Bergh
    • airport-waiting-takeoff-plane
      5 pro tips for surviving your long-haul flight
      Dec 19, 2017  |  by Kobus Van den Bergh
    • young-friends-drinking-beer-at-pub
      10 interesting facts about the UK working holiday visa
      Nov 27, 2017  |  by John Dunn
    • big-ben-on-union-jack
      How long it will take to qualify for ILR in 2018
      Nov 23, 2017  |  by John Dunn
    • blog autumn budget summary
      Autumn Budget 2017: Summary points
      Nov 22, 2017  |  by Scott Brown
     
     

    Do you like cookies? We do, read why.