From July 2016, working holidaymakers in Australia will be paying higher income tax due to the loss of the tax-free threshold announced in Budget 2015.
Under the new tax residency rules, they'll pay taxes on every dollar earned, instead of their first $18,200 being tax-free as is currently the case.
Currently, working holidaymakers can generally be treated as residents for tax purposes if they're in Australia for more than 6 months, and can subsequently avail of the tax-free threshold and low income tax offset (LITO). This means they pay the lower tax rate of 19c on the dollar for income up to $37,000.
When the changes come into effect, people in Australia who are deemed non-residents for tax purposes will pay 32.5c tax on every dollar earned up to $80,000.
It is estimated that this will net the Australian Government an additional $540 million over the next four years. It will have a big impact on the agricultural sector, which relies heavily on hiring backpackers for low-skilled, seasonal work like fruit picking.
The full impact of these changes on backpackers remains to be seen. We'll bring you more news and analysis on this as it emerges.
Read a full summary of how Budget 2015 will affect Australian taxpayers here.
The average tax refund Down Under is AU$2600