If you worked in any of these countries, you could be due a Tax Refund

Controversial Backpacker Tax Slashed

The Australian government has announced that the controversial backpacker tax won't be as high as initially proposed. From January 1, the tax rate for working holidaymakers in Australia will be 19% on earnings up to $37,000. This has been reduced from the proposed 32.5% that was originally announced in the budget and due to start July 1 this year.

So, while there will still be a tax and we certainly can't see this as a good thing, it won't be nearly as high as expected.

For anything above $37,000, ordinary marginal rates will apply.


The average tax refund Down Under is AU$2600



Reduction in visa application fees

The fees for working holiday visa applications will also be reduced from by $50 to $390. The government hopes to encourage more working holidaymakers to apply for visas because they are vital to the tourism and agricultural industries and their numbers have been declining steadily since 2012/13. These changes will be made to the 417 and 462 visas with the hope of improving the supply of working holidaymakers.



Eligible age increase

The eligible age will be increased from 30 to 35. There will also be more flexible arrangements, allowing an employer with premises in different regions to retain a backpacker for a year, as long as the second six months is in a different place.  At present a backpacker can only stay six months with the same employer.

Tourism Australia will also receive $10 million for an international advertising campaign to attract young people to do working holidays in Australia.



Registration of backpackers

To promote tax integrity as well as to collect more data, the government will require employers of backpackers to register with the tax office. Those who fail to register will have to withhold tax at the 32.5% rate – the backpacker would then have to get the extra tax back on lodging their tax return.

The names of registered employers will be public, so available to those on working holidays and to other employers. Scott Morrison. MP, said the new registration system would give better data on who is employing backpackers, and “also help us to address what is the other side of the equation - and that is why are Australians not taking up jobs in the first place? What are the things that need to be done to ensure that Australians will take up these jobs?”.




The tax on working holiday makers’ superannuation payments when they leave Australia will be increased to 95%, yielding $105 million. Morrison said, “this is consistent with the objective of superannuation, which is to support Australians in their retirement, not provide additional funds for working holiday makers when they leave.”


Morrison said the backbench committee had been consulted and was happy with the backpacker changes. The decision to reduce the proposed tax rate from 32.5% to 19% maintains Australia’s status as one of the most competitive destinations for working holidaymakers, while ensuring they pay a fair level of tax.


The average superannuation refund is $1908

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So, if the tax is introduced on January 1 2017, will that mean it only applies to people who enter the country after this date?  


This means that it applies on 1 Jan 2017 onwards. The initial idea was to start 1 July 2016 (2017 tax year in Australia), so that when lodging 2017 tax returns in July 2017 the measures would take effect.



Is this likely to impact when backpackers currently in Oz leave the country?  


It will probably only affect 2017 tax year onwards for applications submitted after 1 Jan 2017.


Do you have any questions in relation to the backpacker tax? Ask us in the comments below!

About The Author

Ciara Kennedy - Digital Content Writer @ Taxback.com

Ciara is our Digital Content Writer at Taxback.com. Since graduating in Journalism and Visual media, Ciara has worked in online marketing in Ireland and Australia and loves writing in all its forms.

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