The Backpackers Guide to Australia — ‘Backpacker Tax’

Important Information & Simple Timeline of the Backpacker Tax

The tax we never wanted

...but in this world nothing can be said to be certain, except death and taxes. - Benjamin Franklin

... Do we have to?

Key points

  • As of October 2019 The 15% ‘backpacker tax’ (introduced in 2015) has been ruled invalid by the Federal Court
  • However, until the Australian Tax Office [ATO] appeal against this decision is finalised, there is NO CHANGE to the current tax on backpackers…
  • As of January 2020 you are still required to pay 15% for every dollar earned up to $37,000 and 32.5% thereafter.

Current tax rates for working holiday makers (417 & 462 visa holders)

Read about your current tax obligations as a WHV holder on the ATO website

Simple timeline of events

2015

  • After some confusion and heated debate the 15% Backpacker tax was introduced, all 417 & 462 working holiday visa holders are required to pay 15 cents for every dollar earnt under the $18,200 threshold to the Australian Tax Office [ATO]
  • Tourism, Agriculture and Hospitality groups across Australia largely oppose this new tax as cumbersome, unfair and detrimental to an economically important community

2017

  • A British woman by the name Catherine who worked in Australia between 2015–2017 in various hospitality roles, disputes a tax bill she received and begins to mount a legal case against the ATO with an Irish based Tax company — Taxback.com

2019

  • A backpacker alongside the Irish Tax Agency appealed this 15% tax on grounds of preceding tax law agreements between Australia and the UK.
  • In October the Federal Court announced the 15% backpacker tax invalid and discrimminatory in nature.
  • The Australian Tax Office instantly appealed this ruling and currently no change has been issued until the matter is resolved in the courts.

“Employer obligations have not changed and employers should apply the PAYG withholding tax rate in accordance with their employees’ Tax File Number declaration,” — statement from the ATO

2020

  • Still awaiting the Federal Courts decision since the ATO appeal…

*We'll continue to update as more news comes out...