The prospect of working in Australia is exciting, but tax complexities can be daunting. Many individuals on a working holiday visa are uncertain about their tax obligations and the rates applicable to them. Understanding these tax rates is a common challenge. The solution lies in familiarizing oneself with the Working Holiday Maker Tax Rates for 2024. This guide offers a detailed overview, covering essential aspects such as the ‘backpacker tax’ and the tax scale for those on a 417 or 462 visa. By the end of this article, you’ll be better equipped to manage your Australian income efficiently.

Overview of the Working Holiday Maker Program

The Working Holiday Maker Program allows young adults to have an extended holiday while engaging in short-term work and study in Australia. It aims to promote cultural exchange and closer ties between participating countries. Participants can explore Australia’s diverse landscapes and culture while gaining international work experience. The program includes two visa subclasses: the Working Holiday visa (subclass 417) and the Work and Holiday visa (subclass 462), each with specific eligibility requirements.

Importance of understanding tax obligations

For Working Holiday Makers, understanding tax obligations is crucial to ensure compliance with Australian tax laws. Knowledge of tax rates, tax returns, and withholding tax helps in accurate financial planning. Awareness of tax obligations aids in avoiding penalties and ensures eligibility for any applicable tax refunds. It also assists in understanding superannuation entitlements and the process for claiming them upon departing Australia.

Understanding Working Holiday Maker Status

The Working Holiday Maker (WHM) program allows young adults to have an extended holiday while being able to work in Australia to fund their travels. It’s essential for participants to understand their tax obligations, as they are required to pay income tax on earnings. The Australian Taxation Office (ATO) oversees the tax aspects of the WHM program, including withholding tax from wages and processing tax returns.

Eligibility criteria for Working Holiday Maker visas:

  • Age between 18 and 30 years (35 for some countries).
  • Hold a passport from an eligible country.
  • Meet health and character requirements.
  • Have sufficient funds for the initial stay in Australia.
  • Not accompanied by dependent children during the stay.

    Types of visas under the Working Holiday Maker Program:

    • Subclass 417 (Working Holiday visa): For applicants from eligible countries, allowing them to work and travel in Australia for up to 12 months.
    • Subclass 462 (Work and Holiday visa): Similar to the 417 visa but for a different set of eligible countries, with additional education requirements for some nationalities.

      WHM visa holders can extend their stay by completing specified work in regional areas, and they are subject to a specific tax rate, often referred to as the “backpacker tax,” which has been a point of contention and subject to changes since its introduction on 1 January 2017. It’s important for WHMs to understand their tax status, as it impacts their taxable income and potential tax refund when departing Australia.

      Tax Rates for Working Holiday Makers in 2024

      For the 2024-25 financial year, Working Holiday Makers (WHMs) in Australia will be taxed as follows:

      • Taxable Income $0 to $45,000: 15%
      • Taxable Income $45,001 to $200,000: $6,750 plus 30% of income over $45,000
      • Taxable Income over $200,001: $53,250 plus 45% of income over $200,000.

        Income Tax and Withholding for Working Holiday Makers

        Working holiday makers in Australia, holding either a 417 or 462 visa, are subject to a flat tax rate of 15% on their earnings up to $45,000 for the income year 2024. Employers of working holiday makers must register with the ATO and withhold tax at the working holiday maker tax rates. The tax-free threshold does not apply to working holiday makers, and they are taxed from the first dollar earned. It’s important for working holiday makers to provide their tax file numbers to their employers to ensure correct withholding.

        Tax Return and Compliance for Working Holiday Makers

        Working holiday makers must lodge a tax return at the end of the financial year to reconcile their tax obligations. If leaving Australia before the end of the income year, they can lodge their tax return early. Working holiday makers should declare all Australian income, including wages and departing Australia superannuation payments. It’s crucial to keep payment summaries and records of income and tax withheld. Non-compliance with tax obligations can result in penalties from the Australian Tax Office.

        Changes and Updates in Tax Rules for 2024

        The tax rate for Working Holiday Makers (WHMs) remains at 15% for income up to $45,000. The Australian Taxation Office (ATO) has updated tax tables to reflect these rates. From 1 July 2024, WHMs will no longer be eligible for the Departing Australia Superannuation Payment (DASP). The tax-free threshold does not apply to WHMs, and they are taxed from the first dollar earned. Employers must register with the ATO to withhold tax at the working holiday maker rate.

        Tips for Managing Taxes as a Working Holiday Maker

        • Understand Your Tax Status: Determine if you’re considered a resident or non-resident for tax purposes, as this affects your tax rate and obligations.
        • Keep Accurate Records: Maintain detailed records of your income, tax withheld, and any deductions you may be entitled to claim.
        • Obtain a Tax File Number (TFN): Apply for a TFN upon arriving in Australia to ensure you’re taxed correctly and to avoid paying the highest tax rate.
        • Lodge Your Tax Return Timely: File your tax return by the deadline (usually 31 October) to avoid penalties and potentially receive a refund if you’ve overpaid tax.
        • Seek Professional Advice: If unsure about your tax obligations or how to maximize your return, consult with a tax professional or use resources provided by the ATO.

          Wrapping Up

          Navigating the Working Holiday Maker Tax Rates in Australia is essential for a seamless experience. The tax system, with its subclass 417 and 462 visas, requires careful attention to ensure compliance. As the financial year progresses, being proactive and lodging your tax return early can alleviate stress. Remember, the ATO is available to assist, so don’t hesitate to seek guidance. Are you ready to manage the tax obligations of your Australian adventure?


          1. How do employers withhold tax for working holidaymakers?
          Employers registered with the ATO as employers of working holidaymakers should withhold tax at the rate of 15% for the first $45,000 earned.

          2. What happens if I don’t provide my TFN to my employer?
          If you do not provide your TFN, your employer must withhold tax at 45% on total payments made to you.

          3. Are departing superannuation payments taxed for working holidaymakers?
          Yes, departing superannuation payments are taxed, and the rate was increased to 65% from 1 July 2017.

          4. What should I do at the end of the income year or when finishing work in Australia as a working holiday maker?
          At the end of the income year or when finishing work, you should access your income statement, consider lodging a tax return, and apply for a departing Australia superannuation payment (DASP) if applicable.

          5. Is the ‘backpacker tax’ legal?
          The legality of the ‘backpacker tax’ has been challenged in court. In a decision in 2021, the High Court found that the tax is not in accordance with Australia’s treaty obligations with the United Kingdom under certain conditions.