AUSTRALIA: Tax Delayed on Australian Working Holiday 417 and 462 Visa

September 21, 2016

As part of the 2015 National Budget, the Australian Federal Government proposed to tax the earnings of Australian Working Holiday Visa holders at a much higher rate than Australian nationals.

The delayed tax proposal, scheduled to come into operation on 1st July 2016, would have seen Working Holiday Visa holders forced to pay 32.5% on every dollar earned, whilst having previously enjoyed tax-free earnings on an income of up to AUS$18000 (£9,500).

Due to strong opposition from the Agricultural and Tourism industries, the Australian government has been forced to delay and review the new tax rules.

Criticism of the New Tax proposals

Predictably the biggest opposition has come from farmers and the tourism industry, expressing concerns over a decrease in the working holiday work force. Criticism from farmers has centred over the effect the tax will have on seasonal farm workers in particular, with backpackers comprising a large percentage of this workforce.

This opposition is unsurprising as there is expected to be a shortage of 127,000 workers over the next 5 years, as well as the fact that Australia”s agricultural industry relies on 40,000 working holiday makers each year.

Despite the criticism and delay, similar changes could still go through meaning backpackers could be forced to pay much higher rates as of 1st January 2017.

Eligibility for Australian Working Holiday Visas

To apply for an Australian Working Holiday Visa 417 you must be between the ages of 18 and 30 and be a national of Belgium, Canada, Republic of Cyprus, Denmark, Estonia, Finland, France, Germany, Hong Kong, Republic of Ireland, Italy, Japan, Republic of Korea, Malta, Netherlands, Norway, Sweden, Taiwan or the United Kingdom.

To apply for an Australian Working Holiday Visa 462 you must be between the ages of 18 and 30; you will also be subject to stricter requirements and you must also be a national of Argentina, Bangladesh, Chile, China, Indonesia, Malaysia, Poland, Portugal, Slovak Republic, Slovenia, Spain, Thailand, Turkey, or the USA.   

For further information on this topic, or for advice on Australian immigration in general, please contact us at [email protected].