The controversy of working holiday makers’ tax rate and the recent updates.


With employers’ increasingly concerned working holiday makers would avoid Australia because of months of uncertainty over the Income tax, parliament finally legislated the changes on 28 November 2016 to set the 15 per cent rate and prevent it defaulting to 32.5 per cent.

From 1 January 2017, Australian tax office will set the tax rate applying to working holiday makers at 15 per cent on earning up to $37,000 with the ordinary marginal tax rates of 32.5 per cent applying after that. Therefore, those employers of working holiday maker will be required to submit a corresponding document to Australian Taxation Office. Failure to disclose the information, the employer will not benefit from the new legislation set above.

In addition, from 1 July 2017 the tax rate on the Departing Australia Superannuation Payment for working holiday makers will be adjusted to 65 per cent.