Backpacker Tax – what you need to know.

With the dust finally settled on the politics of it all, the new tax levels come into effect on January 1st 2017.

As with all tax changes there is still a certain amount of confusion for both employers and travelers’ in terms of what tit means for them.  The ATO have put together information which will hopefully help both traveler and employer.

For travelers’, All 417 or 462 visa holders now fall into this new category of tax which simply is 15% tax on all earnings up to A$37,000.  Above this threshold it reverts to regular tax levels

Super Annuation refunds claimed after July 1st 2017 will be  taxed at 65%

The ATO have created a couple of pages where all the important information can be accessed, it also has some easy to follow working examples.  Which can be found here

A possible issue for travelers will be establishing whether their employer is registered with the ATO to employ people on working holiday visas.  Any employer not registered will have to tax individuals at the foreign resident tax rate of 32.5%

Travelers will be able to claim back the 17.5% overpaid on the following tax return or when they claim back their tax once they leave Australia.

Currently the ATO website suggests it is having “issues with the registration process” and is suggesting employers have until 31st January to complete their registration. More details can be found here and any also business wanting to register can go through the process here


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