Here on a working holiday?

Welcome to the “lucky country”! Australia is a great place to travel and there are lots of opportunities to work whilst you’re here. Unfortunately, a working holiday isn’t automatically a tax holiday and, for the new arrival, the Australian tax system can be a minefield!

Travellers who earn income while in Australia will be expected to pay tax on their earnings. To work out how much, it’s first of all necessary to decide if you’re a "resident" or not.

Resident or non-resident?

In general, overseas students and travellers who come solely to work are "residents" for tax purposes. Residents need to pay tax on any income they earn, from anywhere in the world. Residents don't pay any tax on the first $18,200 of their income, and then pay based on progressively increasing rates after that.

People on holiday here and those who combine the holiday with some paid work will be "non-residents" for tax purposes. If that’s you, you’ll start paying tax from the first dollar earned.


Being a non-resident

How does your tax treatment differ if you are a non-resident?

Firstly, you will be taxed only on income you earn in Australia. But a non-resident is taxed on everything earned from the first dollar (there is no tax-free threshold), and at a flat rate of 32.5%. Travellers can't claim living expenses while in Australia as a living away from home allowance or deduction against your taxable income.

That’s the bad news. The good news is you will be exempt from the 2% Medicare levy, which residents have to pay to cover basic medical costs. Tax is only paid on Australian income. Also interest on bank accounts is only taxed at 10%, not 29%.

The Australian financial year ends on June 30, and tax returns should be lodged after that date. If not enough tax has been taken out whilst you were working in Australia, you’ll have to pay the shortfall. But if you’ve paid too much, you'll get a refund.

If you are leaving the country before the end of the financial year it is possible to lodge your tax return early, but you will need to collect a "payment summary" from every employer and provide details of other income you’ve earned in Australia.

H&R Block can take the pain out of the process by preparing and lodging your tax return for you. We can also advise you exactly which deductions you’re entitled to and which you aren’t. 

June 2016

 

Book a tax return appointment

If you are on a working holiday and need help lodging your tax return, book an appointment at an office near you or call 13 23 25.

Book now

Under 21 or student and need your tax refund asap?

If you are under 21 or a full time student (under 25 years) and need your tax return done, for just $70* H&R Block can do it for you.

Find out more

Book a tax return appointment

If you are on a working holiday and need help lodging your tax return, book an appointment at an office near you or call 13 23 25.

Book now

Under 21 or student and need your tax refund asap?

If you are under 21 or a full time student (under 25 years) and need your tax return done, for just $70* H&R Block can do it for you.

Find out more