Working Holiday Visa Tax Rate: 15% Flat Rate and Superannuation
Working holiday visa holders in Australia pay a flat 15% tax rate on income up to $45,000, with no tax-free threshold. Income above $45,000 is taxed at standard marginal rates. You need a Tax File Number (TFN) to work legally, and your employer must withhold tax from each payment. Superannuation (retirement fund contributions) is payable by your employer and can be claimed back when you permanently leave Australia through the Departing Australia Superannuation Payment (DASP) scheme.
Quick Facts
| Detail | Information |
|---|---|
| Tax rate (up to $45,000) | 15% flat |
| Tax rate ($45,001-$135,000) | 30% |
| Tax rate ($135,001-$190,000) | 37% |
| Tax rate ($190,001+) | 45% |
| Tax-free threshold | None — first dollar is taxed |
| Superannuation rate | 12% (paid by employer) |
| DASP tax rate | 65% (on super withdrawal) |
| TFN processing | 1-4 weeks |
The 15% Flat Rate
Since 1 January 2017, working holiday makers (WHMs) on Subclass 417 and 462 visas have been taxed at a flat rate of 15% on income up to $45,000. This is a specific rate for WHMs — it's different from both the resident and non-resident tax rates.
Key points:
- There is no tax-free threshold. Every dollar you earn is taxed at 15% from the first dollar.
- The 15% rate applies regardless of how long you stay in Australia.
- Income above $45,000 is taxed at higher marginal rates.
For most working holiday makers, the 15% rate means straightforward tax. If you earn $30,000 in a year, you pay $4,500 in tax. No deductions or calculations needed for the basic scenario.
Comparison: WHM vs Resident vs Non-Resident
| Income | WHM Tax | Resident Tax | Non-Resident Tax |
|---|---|---|---|
| $20,000 | $3,000 | $0 (under threshold) | $6,400 |
| $30,000 | $4,500 | $1,717 | $9,600 |
| $45,000 | $6,750 | $4,942 | $14,400 |
The WHM rate is more favourable than non-resident rates but less favourable than resident rates (which have an $18,200 tax-free threshold). The government designed this as a compromise — incentivising WHMs to work while still collecting tax.
Tax File Number (TFN)
You need a TFN to work in Australia. Without one, your employer must withhold tax at the maximum rate of 45%.
How to Get a TFN
- Apply online through the Australian Taxation Office (ATO) website after arriving in Australia
- Provide your passport details, visa information, and Australian address
- Wait 1-4 weeks for your TFN to arrive by post (or check online via myGov)
Apply as soon as you arrive — the earlier you have your TFN, the sooner your employer can withhold at the correct rate. If you start work before receiving your TFN, give it to your employer within 28 days. They'll adjust your tax withholding retrospectively.
TFN Declaration
When you start a new job, your employer will ask you to complete a TFN declaration form. On this form:
- Enter your TFN
- Indicate you're a working holiday maker (this determines the correct withholding rate)
- Do NOT claim the tax-free threshold (WHMs are not entitled to it)
Lodging a Tax Return
Do You Need to Lodge?
Yes, if you earned income in Australia during the financial year (1 July to 30 June). Even if tax was withheld correctly, lodging a return may result in a refund if you had deductions.
How to Lodge
Online via myTax: Create a myGov account, link it to the ATO, and use the myTax system to lodge. It's free and pre-fills most information from employer reports.
Through a tax agent: A tax agent can lodge on your behalf, typically charging $50-$150. Useful if you have complex situations (multiple employers, deductions, PAYG variations).
Paper form: Old-school option. Download the form from the ATO website, complete it, and mail it in.
Common Deductions
You can claim deductions that reduce your taxable income:
- Work-related travel between work sites (not home to work)
- Protective clothing and sunscreen for outdoor farm work
- Tools and equipment purchased for work
- Laundry of work-specific clothing
- Union fees if applicable
Keep receipts for everything. Deductions are subtracted from your taxable income, so a $500 deduction saves you $75 in tax (15% of $500).
Superannuation
What Is Superannuation?
Superannuation (super) is Australia's compulsory retirement savings system. Your employer must pay 12% of your ordinary earnings into a super fund on top of your wages. This money is separate from your pay — it goes directly to the super fund.
Example: If you earn $1,000/week, your employer pays an additional $120/week into your super fund. You don't see this money in your bank account, but it's yours.
Choosing a Super Fund
You can choose your own super fund or accept your employer's default fund. For WHMs, it doesn't matter much which fund you choose — you'll be withdrawing the money when you leave Australia anyway. Pick one with low fees.
Claiming Super Back: DASP
When you permanently leave Australia, you can claim your superannuation through the Departing Australia Superannuation Payment (DASP) scheme.
DASP requirements:
- You've left Australia
- Your visa has expired or been cancelled
- You accumulated super while on a temporary visa
How to claim:
- Wait until your visa has expired or been cancelled (after leaving Australia)
- Apply online through the ATO's DASP application
- Provide your super fund details, passport, and bank account
- Wait 4-6 weeks for processing
DASP tax rate: 65% for WHMs. Yes, 65%. This is the painful part — the government takes a large cut of your super when you withdraw it early. On a super balance of $5,000, you'd receive approximately $1,750 after the 65% tax.
Is it worth claiming? Yes — even after the 65% tax, it's free money that would otherwise sit in a super fund indefinitely. A $10,000 super balance returns $3,500 to you. Not ideal, but better than nothing.
Tax Tips for Working Holiday Makers
- Get your TFN immediately upon arrival — delays mean higher withholding
- Keep all receipts for work-related expenses
- Lodge your tax return even if you don't think you're owed money — you might be
- Don't forget super — it's easy to forget about, but it adds up
- Use the ATO app to track income and deductions throughout the year
- Lodge before leaving Australia if possible — it's easier with an Australian address and phone number
Medicare
Working holiday makers are NOT eligible for Medicare (Australia's public health system) unless they're from a country with a reciprocal healthcare agreement. Countries with agreements include the UK, Ireland, New Zealand, Belgium, Finland, Italy, Malta, Netherlands, Norway, Slovenia, and Sweden.
If you're not eligible for Medicare, the Medicare levy (2%) is not charged on your income. If you are eligible (and enrolled), the levy applies. This is handled automatically through your tax return.
Frequently Asked Questions
Do I pay the 15% rate if I work for less than 6 months?
Yes. The 15% WHM rate applies regardless of how long you work. Even if you work for one month, your income is taxed at 15%.
What if my employer withheld too much tax?
Lodge a tax return after 30 June (end of financial year). If too much was withheld, you'll receive a refund. This commonly happens when employers withhold at a higher rate initially (before they have your TFN).
Can I claim the tax-free threshold?
No. Working holiday makers are specifically excluded from the $18,200 tax-free threshold. Every dollar is taxed at 15% from the first dollar.
Do I need to report cash-in-hand income?
Legally, yes. All income must be declared, regardless of how it was paid. Cash-in-hand work is also problematic because it won't provide the documentation you need for your second-year visa.
What about cryptocurrency or investment income?
Investment income earned while in Australia (including crypto gains) is taxable. Non-resident tax rates (not the WHM 15% rate) typically apply to investment income. Consult a tax professional if you have significant investment income.
Can I get my super back while still in Australia?
No. DASP is only available after you've left Australia and your visa has expired or been cancelled. You cannot access super while still in Australia on a temporary visa.
