Australian working holiday 417 and 462 visa tax delayed,The Australian Federal government has delayed plans to tax the earnings of Australian working holiday visa holders on 462 and 417 visas by six months. However, if similar changes go through new tax rules from 1 January 2017 could see ‘backpackers’ forced to pay much higher taxes than Aussies. The new tax rules previously announced as part of the 2015 National Budget, had been strongly opposed by farmers and the tourism industry forcing Australian immigration to review the plans.
Across the Australian tourism industry alone, there’s expected to be a shortfall of 127,000 workers over the next five years. Foreign workers represent approximately 10 percent of the tourism industry’s workforce. 40,000 working holiday makers are needed for Australia’s agricultural industry every year.
Australian backpacker visa tax
The ‘backpacker tax’ originally scheduled for introduction from 1 July 2016 would have seen travellers on Australian working holiday visas forced to pay 32.5% on every dollar earned, having previously had to pay no tax on an income of up to AUS$18,000 (£9,500).
Under the new tax rules, a non-resident in Australia earning approximately AUS$40,000 per year potentially faces a personal income tax amounting to AUS$13,000, leaving them with a net salary of AUS$27,000.
Current tax rules see a non-resident person, earning $40,000 per year, taxed just AUS$4,547 in personal income tax, leaving a net income of $35,453. However, while Australian working holiday visa holders may currently pay less in income tax, they pay far more than Australian citizens in other areas.
For instance, when temporary residents exit Australia, they’re entitled to withdraw their entire pension (known as superannuation in Australia), but pay a tax of anywhere between 38 and 47 percent. In contrast, Aussie residents who withdraw their pension prior to turning 55 are taxed at just 20 percent.