Update on Backpacker Tax: What you need to do to get your Australian Tax Refund

What is Backpacker Tax?

Backpacker Tax was introduced in December 2016 with working holidaymakers having to pay a 15% levy on income up to $37,000, which was a much higher rate than Australian citizens, who didn’t have to pay any tax until they earned at least $18,200.

After a November 2021 ruling that the ‘Backpacker Tax’ was invalid, many holidaymakers were left wondering if they are entitled to claim a tax refund.

Who can claim an Australian tax refund?

Working holidaymakers who were in Australia during the 2017-2021 period can apply for a tax refund and could also be eligible for the tax-free allowance if they meet this criteria:

• They are a holder of a visa subclass 417 Working Holiday or 462 Work and Holiday.
   
• They are a resident of Australia for tax purposes for the entire (or part of) income year. (All temporary visa holders entering Australia are taxed as non-residents. However, if you visit Australia for longer than six months, live in the same place and establish yourself in the local community, then you may be considered an Australian resident for tax purposes).
   
• They are from one of the following countries:
   
  • Chile
  • Finland
  • Germany
  • Israel
  • Japan
  • Norway
  • Turkey
  • United Kingdom

How do I claim an Australian Backpacker tax refund?

If you wish to apply for a tax refund application, you will need to gather the following documents together:

• Your PAYG form
• A copy of your ID
• Your Tax File Number
• A signed letter of engagement

How much is a Backpacker Tax refund?

It could run to thousands of dollars! It very much depends on personal circumstances. You could also be entitled to claim back Superannuation contributions that you paid during the time you were employed in Australia.

What are the current Backpacker Tax rules?

The new ‘Backpacker Tax’ tax rate is a flat 15% for the first $45,000 of earnings.

You also need to think about superannuation payments which are compulsory in Australia. This is currently paid at 10% or your ordinary, pre-tax earnings and goes up to 10.5% from July 1^st 2022.

If you never plan to work in Australia again when you leave, you can access this superannuation via the ‘Departing Australia Superannuation Payment’ (DASP) scheme. To apply, all you need are your visa details and your tax file number. An important note is that tax on the DASP is 65%.

How we can help you claim a Backpacker Tax refund

Book an appointment with your local TaxAssist Accountant. We will need to review your personal situation to assess if you qualify, but if you do, we will work with you to ensure you receive the tax back you are due. Call us on 02 9608 3707 or make an enquiry here.

Date published 28 May 2022 | Last updated 9 Jul 2022

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.