The Australian tax year runs from 1st July to 30th June each year. Tax returns lodged by individuals have to be filed any time from 1st July to 31st October, for the previous year. If you do not fill in a tax return, penalties can apply.

Backpackers are almost always not considered residents for tax purposes. Though most of us will spend a year or more living and working here, this actually doesn’t matter. Owing to the nomadic nature of most working holidays, this isn’t the same as moving here for good.

Working holiday makers – those on the 417 and 462 visas get taxed differently. The system changed on 1st January 2017.

Changes to the Backpacker Tax

Changes to the Working Holiday Visa started being rolled in on the 1st January. This has meant changes to the price and assessment of visas, the taxation of Superannuation upon leaving the country, and also – you guessed it – changes to the tax system.

Essentially, the previous system sometimes allowed working holiday makers to claim residency. This meant many backpackers were able to claim the tax-free threshold from their employment, and could therefore claim a lot of tax back when doing their tax return. For example, if you were initially taxed at the foreign resident rate of 32.5%, you could basically claim all of this money back up to the first $18,200 of your wage.

However, from 1 January 2017, backpackers as a group have been taxed at a flat rate of 15% up to the first $37 000. Above this the normal rates will apply.