Working Holiday Visa Tax Rate in 2025

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The ATO considers that most people who come to Australia on a temporary working visa or visit are generally not considered Australian tax residents.

This is because, consistent with their visa requirements, it is not the intention to stay in Australia permanently, but only intend to have a holiday while working some of the time. The Working Holiday Maker program allows young adults to enjoy an extended holiday in Australia while working to fund their travels.

Individuals will be either:

  • an Australian resident
  • a foreign resident.

Whether you are an Australian or a foreign resident for tax purposes this does not  affect the rate of tax you pay.

The only exception to this is if you are both:

  • an Australian resident for tax purposes
  • from a non-discrimination article (NDA) country, see below.

Most people who come to Australia for a working holiday or to visit are considered to be foreign residents for tax purposes, unless you can satisfy the residency tests.

Sydney opera house

Australian Resident WHM from NDA Country

If you are considered to be a tax resident and can satisfy the residency tests you may be eligible to be taxed on the same basis as a resident Australian national.

To be eligible, you must be:

  • an Australian resident for tax purposes and
  • from an NDA country.

A resident Australian national is someone who meets both of the following:

  • the person is a resident of Australia for tax purposes
  • the person is a permanent resident of Australia or an Australian citizen.

Australia’s tax treaties with NDA countries contain non-discrimination articles that affect how much tax is payable.

Should you travel to Australia as a working holiday maker either on a 417 (working holiday) or a 462 (work & holiday) visa, the first $45,000 of your earnings, which are considered Australian income, is taxed at 15% and the balance is taxed at ordinary rates. This is regardless of residency status.

As a non-resident for tax purposes, you are subject to specific tax obligations as a working holiday maker in Australia. If you are an Australian working abroad, see our Australian expat tax advice.

As a foreign tax resident working in Australia you are still required to lodge an Australian Tax Return with the Australian Taxation Office (ATO) to report your Australian sourced income, declare all Australian income, and fulfill your tax obligations.

Australian Federal Court backs 2019 ruling the controversial ‘backpacker tax’ invalid

Following an appeal by the ATO, the Australian High Court has (November 2021) reaffirmed a court ruling from October 2019 which stated that the ‘Backpacker Tax’ cannot be levied on citizens from certain foreign countries, namely UK, the US, Germany, Finland, Chile, Japan, Norway and Turkey. 

The High Court’s decision was influenced by Australia’s treaty obligations, particularly with countries like the UK, which impacted the legality and application of the backpacker tax.

What does this ruling mean for Backpackers?

If you visited Australia as a working holidaymaker between 2017 – 2020, it’s highly likely that you will be entitled to a significant tax refund as a result of this case!

Affected WHMs from NDA countries (e.g., UK, Germany) who were considered to be tax residents can still claim refunds for 2017–21 if not already processed by the ATO.

Put simply, if you think you have been affected by the Backpacker Tax, you should contact GM Tax.

Backpackers from other countries

We anticipate that there will be further developments in this case which will affect backpackers from other countries.

The Australian tax year runs from 1st July to 30th June.

You will need to apply for a tax file number in order to lodge an Australian Tax Return.

Determining Australian Tax Residency Status

Australian tax residents

If you are arriving in Australia to work on a working holiday visa regardless of your tax residency status your income is taxed at working holiday rates of tax. Your working holiday maker status and visa details are important factors in determining your tax residency and obligations, as they help confirm your eligibility for specific tax rates and benefits.

It is important that you obtain professional tax advice in relation to your Australian tax residency position as this may impact your ongoing tax and reporting implications. Tax compliance for working holiday makers is important to avoid penalties from the ATO.

The primary test of tax residency is called the resides test. If you reside in Australia, you are considered an Australian resident for tax purposes and you do not need to apply any of the other residency tests.

There are a number of tests to best determine your residency position which are detailed below:

Some of the factors that can be used to determine residency status include:

  • physical presence
  • intention and purpose
  • family
  • business or employment ties
  • maintenance and location of assets
  • social and living arrangements.

There Are Several Aspects of The Resides Test

  • What does it mean to ‘reside‘ – “to dwell permanently, or for a considerable time, to have one’s settled or usual abode, to live, in or at a particular place”
  • Entering Australia
  • Behaviour while in Australia, what is your intention & purpose?
  • Physical presence in Australia
  • Nationality

You are an Australian tax resident if your domicile (the place that is your permanent home) is in Australia, unless your permanent place of abode is outside of Australia.

A domicile is a place that is considered to be your permanent home by law. For example, it may be a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).

There are two steps to this test:

Determine your domicile

  • If not in Australia, the domicile test is not satisfied.
  • If in Australia, go to step two.

Determine your permanent place of abode

  • If not in Australia, the domicile test is not satisfied.
  • If in Australia, you are considered an Australian resident for income tax purposes.

This test only applies to individuals arriving in Australia. You will be a tax resident of Australia under this test if you are physically present in Australia for more than half the income year, whether continuously or with breaks.

Under this test, you may be said to have a constructive residence in Australia unless it can be established that:

  • your usual place of abode is outside Australia
  • you have no intention to take up residence here.

In this test, your usual place of abode must be outside of Australia. This is different to the first test (domicile) that requires us to be satisfied that your permanent place of abode is outside Australia.

If you as a Australian government employee, you are considered a resident of Australia for tax purposes, even if you live outside the country. This applies to employees who contribute to certain public sector superannuation schemes.

Under the Commonwealth superannuation test, you are an Australian tax resident if you are a contributing member of:

  • the Public Sector Superannuation Scheme (PSS), or
  • the Commonwealth Superannuation Scheme (CSS).

This test does not apply if you are a member of the Public Sector Superannuation Accumulation Plan (PSSAP).

If you are an Australian resident under either of these this tests, your spouse and any children under 16 years old are also Australian residents for tax purposes.

working holiday map, pins represent visited locations

How Are Working Holiday Makers Taxed?

If you work in Australia as a working holiday maker (WHM), your employer will withhold tax from your pay and you may need to lodge a tax return each year. Working holidaymakers are subject to specific tax rules under the Australian tax system, including the working holiday maker tax, which sets out how income is taxed for those on 417 and 462 visas. The backpacker tax rules apply to holders of subclass 417 and 462 visas.

You are a WHM if you have a visa subclass of either:

  • 417 Working Holiday
  • 462 Work and Holiday (backpackers).

Compare with 482 visa tax rates.

Your residency for tax purposes

For tax purposes in Australia, individuals will be either:

  • an Australian resident
  • a foreign resident.

For most Working Holiday visa holders (visa subclass 417), whether you are an Australian or a foreign resident for tax purposes does not affect the rate of tax you pay.

The only exception to this is if you are both:

  • an Australian resident for tax purposes
  • from a non-discrimination article (NDA) country.

Criteria for same tax rate

You may be taxed on the same basis as a resident Australian national if you satisfy all the following – you are:

  • the holder of a Working HolidayExternal Link (subclass 417) visa or Work and HolidayExternal Link (subclass 462) visa
  • a resident of Australia for tax purposes for the whole or part of the income year from one of the following NDA countries
    • Chile
    • Finland
    • Germany (for 2017–18 and later income years)
    • Israel (for 2020–21 and later income years)
    • Japan
    • Norway
    • Turkey
    • United Kingdom.

A resident Australian national is a person who is both:

  • a resident of Australia for tax purposes
  • a permanent resident of Australia or an Australian citizen.

Most people who come to Australia for a working holiday or to visit are foreign residents for tax purposes.

Tax withheld by your employer

If you are a WHM, and your employer is registered with us as a WHM employer, employers must be registered with the ATO and use the appropriate tax tables to calculate the correct amount of tax to withhold from working holidaymakers’ pay.

Working holiday makers need to provide their tax file number (TFN) to their employers. Employers must register with the Australian Taxation Office (ATO) to withhold tax at the backpacker tax rate. They will withhold tax at a rate of 15% for the first:

  • $45,000 you earn during 2022–23 and later income years.

Higher rates of withholding will apply above these thresholds. Providing a valid TFN is essential for accurate tax withholding.

Tax Rates For Holiday Visa Holders

The following tax rates for 2024–25 apply for working holiday makers holding a subclass 417 or 462 visa, or a COVID-19 pandemic event 408 visa from 1 July 2022.

 

Taxable Income Tax on This Income
$0 – $45,000 15%
$45,001 – $135,000 $6,750 + 30% of amount over $45,000
$135,001 – $190,000 $33,750 + 37% of amount over $135,000
$190,001 and over $54,100 + 45% of amount over $190,000

Note: These apply to WHMs on 417/462 visas; no Medicare levy for foreign residents.

 

These taxes are withheld from your wages throughout the financial year under the PAYG (Pay As You Go) system.

If no TFN is provided you must withhold at 45% on total payments made.

Claiming A Tax Refund

End of income year or finishing work

At the end of the financial (tax) year or when you cease working in Australia you need to consider whether to:

Access your income statement

At the end of the income year or when you finish work in Australia, you may choose to or need to lodge a tax return. The information on your income statement or payment summary will help you to work out if you need to lodge a tax return.

Your employer will usually provide an income statement through Single Touch Payroll (STP). It will show the amount you earned, tax withheld and superannuation that has been paid. You will be able to access and see your year-to-date tax and super information (income statement) in ATO online services through your myGov from within Australia.

If your employer is not yet using STP they will provide you with a payment summary.

Lodge a tax return

The Australian financial (tax) year starts on 1 July and ends on 30 June the following year.

Depending on your circumstance you may want to lodge a return.

You do not need to lodge a tax return or a non-lodgment advice if both of the following apply:

  • All of your income was earned as salary or wages while you were a WHM.
  • The total of your taxable income for the income year was less than $45,001 for 2022–23 and later income years.

If you leave Australia permanently before 30 June, you can lodge your tax return early by paper, processing times are up to 50 business days.

The ATO will only accept an early lodgment tax return for individuals before the end of the income year if you are either:

  • a foreign resident for tax purposes and you
  • are leaving Australia permanently
  • will no longer derive Australian-sourced income (other than interest, dividend and royalty income)
  • an Australian resident for tax purposes and you
  • are leaving Australia
  • are ceasing to be an Australian resident for tax purposes
  • will no longer derive Australian-sourced income (other than interest, dividend and royalty income).

Deductions

You can claim deductions expenses you have incurred in your tax return. Most are work-related expenses you have incurred to earn your income as an employee.

To claim a deduction for a work-related expense, you must meet the 3 golden rules:

  • You must have spent the money yourself and have not been reimbursed.
  • The expenses must directly relate to earning your income.
  • You must have a record to prove it (usually a receipt).

You claim these in your tax return at the ‘Work-related expense’ sections.

If the expense was for both work and private purposes, you only claim a deduction for the work-related use.

You cannot claim a deduction if your employer pays for or reimburses you for any of these costs.

Other work-related expenses

You may be able to claim other work-related deductions for expenses you incur in the course of earning your income.

You claim these in your tax return as an ‘Other work-related expense’.

These may include:

  • Working from home expenses
  • COVID-19 test expenses
  • Phone, data and internet expenses
  • Tools, equipment and other assets
  • Union fees, subscriptions to associations and bargaining agents fees

Other expenses

You may also be able to claim a deduction for other expenses you incur that do not relate to your work or income producing activities.

You claim these in your tax return at the specific expense category (where available) or as an ‘Other deduction’.

These may include:

  • Cost of managing tax affairs
  • Gifts and donations
  • Interest, dividend and other investment income deductions
  • Income protection insurance

Occupation and industry specific guides

Our occupation and industry specific guides give you information about income, allowances and deductions you can claim for work-related expenses. We tailor these to address common claims and errors in your occupation or industry.

Managing your deductions

You need to keep records for most expenses when you claim a deduction.

You can use the myDeductions tool in the ATO app to help keep track of your:

  • work-related expenses (such as, vehicle trips)
  • general expenses (such as, gifts and donations).

Departing Australia Superannuation Payment (DASP) – when leaving

If you worked and earned superannuation while visiting Australia on a temporary visa, you can apply to have this superannuation paid to you as a departing Australia superannuation payment (DASP) after you leave. 

Departing superannuation payments for working holiday makers are taxed at a rate of 65% if you claim your DASP after 1 July 2017.

Generally, you can claim a departing Australia superannuation payment (DASP) if the following apply:

  • you accumulated superannuation while working in Australia on a temporary resident visa issued under the Migration Act 1958 (excluding Subclasses 405 and 410)
  • your visa has ceased to be in effect (for example, it has expired or been cancelled)
  • you have left Australia and you do not hold any other active Australian visa
  • you are not an Australian or New Zealand citizen, or a permanent resident of Australia.

Note: If you are a New Zealand citizen leaving Australia permanently, you may be able to transfer your super to New Zealand under the Trans-Tasman retirement savings portability scheme for individuals.

Your DASP is taxed before you receive it. The DASP tax rate is different for working holiday makers (WHM). If you hold (or held) a 417 (Working Holiday) or 462 (Work and Holiday) visa you are classified as a WHM.

If it has been six months or more since you left Australia, your visa has ceased to be in effect. If you have not claimed DASP, your superannuation fund will transfer your superannuation money to the ATO as unclaimed superannuation.

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Get in touch

Specialist Working Holiday Tax Return Services

If you are on a subclass 417 (Working Holiday) or 462 (Work and Holiday) visa, we are here to simplify your tax journey.

As specialists in UK-Australian expat tax services with offices nationwide in Australia and the UK, we help you stay compliant, claim refunds, and maximise your adventure. Whether arriving, exploring, or heading home, get personalised advice: fixed fees, no surprises.

Contact Us

FAQs

Yes, middle brackets lowered to 30% from 32.5%, thresholds were raised. 2025/26 rates have remained unchanged.

Yes, you can still claim remote work deductions post-COVID if the expenses directly relate to earning your income and you keep proper records, using methods like the 67 cents per hour fixed rate or actual costs.

This would depend on the amount of income you earn.

Most who come to Australia for a working holiday or visit are not considered to be residents for tax purposes.

See the applicable rates below. Note that the 15% rate has remained unchanged since the 2020-21 tax year, however thresholds and middle bracket rates changed in 24/25.

Taxable Income Tax on This Income
$0 – $45,000 15%
$45,001 – $135,000 $6,750 + 30% of amount over $45,000
$135,001 – $190,000 $33,750 + 37% of amount over $135,000
$190,001 and over $54,100 + 45% of amount over $190,000

No, see above rates of tax.

Backpackers, holidaymakers, students and holders of  a 417 visa may  be eligible for a tax refund, provided that you meet certain requirements.

You can apply via the ATO website, you need to:

  • be 15 years and older
  • have an Australian Passport
  • have at least one other Australian identity document such as a drivers licence.

The filing deadline will vary depending of whether you are lodging the tax return yourself of via a registered tax agent:

  • Lodging yourself the filing deadline is 31 October.
  • Lodging via a tax agent the filing deadline is May the following year, if all your prior year tax returns have been lodged on time.
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