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Changes to Backpacker Tax Withholding Rates

Changes to Backpacker Tax Withholding Rates

International Tax for Individuals Coming to Australia

on Working Holiday Visas


From the 1st January 2017 there are new changes to backpacker tax withholding rates.

Employers need to be aware that they will need to take out more tax from any employees who are on a 417 (working holiday) or 462 (work and holiday) VISA.

Registered employers of working holiday makers will need to withhold 15% tax from an employee that holds a 417 (working holiday) or 462 (work and holiday)

VISA from the first $37,000 of income. Should the employee exceed $37,000 of income, the balance will then be taxed at ordinary tax rates.

Employers of working holiday makers are required to register with the Australian Taxation Office as employers of working holiday makers.

The Australian Taxation Office will receive information from the Department of Immigration and Border Protection, which will help employers identify people who are on a 417 or 462 VISA to ensure an employee/s tax is assessed correctly.

When an employee starts work they need to provide the employer with a TFN declaration. This tells the employer everything they need to know to work out how much tax to withhold from an employees pay. This is where an employer can check to see if their new employee has a VISA subclass 417 (working holiday) or 462 (work and holiday) to ensure they are taxed correctly.

If you have already employed an employee who has a VISA subclass 417 or 462 prior to 1 January 2017 you will need to ensure you update the tax withholding rates for that employee/s.

Should you require further advice regarding backpacker tax withholding rates or any other information to do with working holiday visa holders please contact our office on (07) 3263 7030 or email to discuss with one of our helpful accountants.