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    TaxKilnAustralia tax guidance

    Working Holiday Maker Tax

    The WHM tax scale for 417 and 462 visa holders, employer registration obligations, superannuation and the 65% DASP rate, Medicare access through reciprocal agreements, and non-discrimination treaty exceptions.

    Working holiday makers on 417 and 462 visas are taxed at a flat 15% on the first $45,000 of income from the first dollar, with no tax-free threshold, under Schedule 7 of the Income Tax Rates Act 1986. Employers must register with the ATO as WHM employers before making the first payment. When a WHM permanently departs Australia and their visa ceases, accumulated superannuation can be claimed back through DASP, but the WHM-specific DASP tax rate is 65% on the taxable component, nearly double the 35% rate for other temporary residents.

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    WHM tax rates for 2025-26 and 2026-27

    Working holiday makers on 417 and 462 visas are subject to a special tax scale with no tax-free threshold. This scale is implemented through Schedule 7 of the Income Tax Rates Act 1986. The rates are confirmed unchanged for both 2025-26 and 2026-27. The 2026-27 resident rate reduction (16% to 15% on the $18,201 to $45,000 band) does not alter the WHM table.

    Employer registration and withholding obligations

    Before making the first payment to a working holiday maker, the employer must hold an active ABN and be registered for PAYG withholding, register once with the ATO as an employer of working holiday makers, and check and record the worker's visa subclass (417 or 462) and TFN. Registered employers withhold at the WHM rates (15% on the first $45,000, then higher bands). Unregistered employers must withhold at 30% on every dollar up to $135,000, then at foreign-resident rates, and face penalties. WHM income and withholding must be reported via Single Touch Payroll (STP) using the specific WHM income labels.

    Superannuation for working holiday makers

    WHMs are treated like other eligible employees for superannuation guarantee purposes. Employers must pay SG at the prevailing rate (12% for 2025-26) into a complying super fund. WHMs must be given a choice of fund if eligible; otherwise the employer pays into the default fund. Super contributions accumulate in the fund and cannot be accessed until a condition of release is met (normally preservation age plus retirement, or age 65), unless the WHM departs Australia permanently and applies for DASP.

    DASP: the 65% departure tax on WHM super

    When a working holiday maker permanently leaves Australia and their visa ceases, they can apply for a Departing Australia Superannuation Payment. The DASP tax rate on the taxable component of WHM-funded super is 65%, introduced from 1 July 2017. For comparison, other temporary residents face a 35% DASP rate. This means WHMs effectively lose nearly two-thirds of their accumulated super when departing. To apply: link your myGov account to the ATO, provide passport details, bank account for payment, and proof of departure. The super fund pays the DASP amount less the withholding tax. The 65% rate is confirmed unchanged for 2026-27.

    Medicare access and reciprocal health care

    Most WHMs are not entitled to full Medicare. However, WHMs from countries with Reciprocal Health Care Agreements (RHCAs) can access limited Medicare for medically necessary care during their visit. Australia has RHCAs with 11 countries: the UK, New Zealand, Italy, Belgium, Netherlands, Sweden, Finland, Norway, Ireland, Malta, and Slovenia. Coverage scope and duration vary by agreement. Many WHMs are foreign residents for tax purposes and can claim a full exemption from the 2% Medicare levy. WHMs who qualify as Australian tax residents and are covered by Medicare may be liable for the levy unless an exemption or reduction applies.

    Tax residency and non-discrimination treaty exceptions

    Most WHMs are foreign residents for tax purposes due to their short period of stay and usual place of abode being overseas. Residency is determined under the standard ITAA 1936/1997 tests (resides test, 183-day test, domicile test). However, a WHM who satisfies the residency tests (long-term stay, stable accommodation, clear intent to reside) can become an Australian tax resident. Due to the backpacker tax litigation and subsequent treaty interpretations, WHMs from certain countries with non-discrimination articles who are residents for tax purposes must be taxed at ordinary resident rates, not the WHM scale. Applicable countries include the UK, Germany, Japan, Chile, Finland, Norway, Turkey, and Israel. For a WHM whose facts point towards residency (two-year stay, long-term lease, full-time job in one city), claiming resident tax treatment can result in a significantly lower tax bill thanks to the $18,200 tax-free threshold.

    Common WHM industries and visa extension work

    Working holiday makers cluster heavily in agriculture and horticulture (fruit picking, harvest work, regional farm labour), hospitality (cafes, restaurants, bars, hotels, catering), construction and labouring (basic onsite labour, trades assistant roles), and tourism and services (hostels, tour operations, cleaning, events). These industries are often targeted for WHM visa extension criteria. Second and third WHM visas require specified periods of regional work in specified industries and specified regions. The tax treatment of this work is identical to other WHM employment, but the regional and industry requirements drive where WHMs work and for how long.

    Statute references

    • Income Tax Rates Act 1986, Schedule 7 Part I (WHM tax rates)
    • ITAA 1997 Division 1A (WHM income definition)
    • Superannuation Guarantee (Administration) Act 1992
    • ATO WHM employer registration and withholding guidance
    • ATO DASP information (WHM 65% rate from 1 July 2017)
    • Reciprocal Health Care Agreements (11 countries)
    • Non-discrimination articles in bilateral DTAs (UK, Germany, Japan, Chile, Finland, Norway, Turkey, Israel)

    Frequently asked questions

    Do I need to lodge an Australian tax return as a working holiday maker?+
    If all your income is WHM employment income and your total taxable income is $45,000 or below, you are generally not required to lodge a return because the correct tax should have been withheld at source. However, you must lodge if your taxable income exceeds $45,000, if you have other income (bank interest, business income), or if you want to claim a refund for over-withheld tax or deductions. Even when not strictly required, lodging a return can result in a refund if your employer withheld at a higher rate than the WHM scale.
    My employer is withholding 30% instead of 15%. What should I do?+
    Your employer has likely not registered with the ATO as an employer of working holiday makers. Without registration, the employer must withhold at 30% on every dollar up to $135,000 and faces penalties for non-compliance. Confirm your visa subclass (417 or 462) with your employer and ask them to register via the ATO business portal. Once registered, future payments should be withheld at the correct 15% WHM rate. For amounts already over-withheld, you can claim the excess back by lodging an Australian tax return at year end.
    Can I access Medicare as a working holiday maker?+
    Most WHMs are not entitled to full Medicare. However, WHMs from countries with Reciprocal Health Care Agreements (RHCAs) can access limited Medicare for medically necessary care. Countries with RHCAs include the UK, New Zealand, Italy, Belgium, Netherlands, Sweden, Finland, Norway, Ireland, Malta, and Slovenia. Coverage scope and duration vary. Many WHMs are foreign residents for tax purposes and can claim a full exemption from the 2% Medicare levy.
    I have been in Australia on a WHM visa for two years with a long-term lease and a full-time job. Can I claim resident tax rates?+
    Possibly. While most WHMs are foreign residents for tax purposes, a WHM can become an Australian tax resident if they satisfy the residency tests (long-term stay, stable accommodation, clear intent to reside). Additionally, WHMs from countries with non-discrimination articles in their DTA with Australia (including the UK, Germany, Japan, Chile, Finland, Norway, Turkey, and Israel) who are residents for tax purposes must be taxed at ordinary resident rates, not the WHM scale. If your facts point towards residency, it may be worth seeking advice on claiming resident treatment.

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