If you’re in Australia on a working holiday visa (subclass 417 or 462), your income is taxed under a special schedule: a flat 15% on the first $45,000 you earn in 2026-27, with no tax-free threshold. Your employer withholds it from each pay; your final figure — and any refund — is sorted when you lodge a tax return.
How working holiday maker tax works
The so-called “backpacker tax” is the ATO’s working holiday maker (WHM) tax schedule. It applies from the first dollar you earn: there is no $18,200 tax-free threshold for WHM income, and you don’t pay the Medicare levy on it.
Working holiday maker tax rates 2026-27
| Taxable income (2026-27) | Tax on this income |
|---|---|
| $0 – $45,000 | 15c for each $1 |
| $45,001 – $135,000 | $6,750 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $33,750 plus 37c for each $1 over $135,000 |
| $190,001 and over | $54,100 plus 45c for each $1 over $190,000 |
These rates apply to income paid from 1 July 2026 and cover both subclass 417 and subclass 462 visa holders — there is no tax difference between the two visas. Above $45,000 the rates are identical to the ordinary foreign resident schedule. They’re published by the ATO in Schedule 15 – Tax table for working holiday makers.
The mechanism that makes this work is employer registration. Your employer must register with the ATO as a WHM employer to withhold at 15%. If they’re registered and you gave them your TFN, they withhold a flat 15% on every pay until your total with them passes $45,000 for the year, then move to the higher rates.
Two situations blow that up: an unregistered employer must withhold at the foreign resident rate — 30% from the first dollar (roughly double what you owe under $45,000; the excess comes back when you lodge) — and with no TFN your employer must withhold 45% on every pay.
Withholding is a prepayment, not your final tax. What your payslips show during the year is what your employers withheld. What you actually owe is calculated on your total income when you lodge — the difference is your refund or, occasionally, a bill.
Is your employer registered? Check your payslip
Look at the tax line on your first payslip. If you’re earning, say, $900 a week and roughly $135 is withheld, that’s the 15% rate. If roughly $270 is withheld, you’re being hit at 30%: your employer is probably not registered. Ask them directly — and remember the excess comes back when you lodge.
The residency trap: visa status vs tax residency
This is the most misunderstood part of backpacker tax. Your visa and your tax residency are two separate tests. Holding a 417 or 462 visa says nothing about whether you’re an Australian resident for tax purposes.
In practice, most working holiday makers are foreign residents for tax purposes. You’re travelling and don’t intend to settle, so under the ATO’s resides/domicile/183-day tests you typically don’t qualify as a resident. That’s fine, because for your working holiday income it hardly matters: WHM employment income with a registered employer is taxed at WHM rates regardless of your residency.
Where residency does matter is everything else: bank interest, income from an unregistered employer, and any other Australian-sourced income not covered by the WHM schedule — taxed at foreign resident rates (30% from the first dollar). If you’ve genuinely settled enough to be a tax resident, that other income gets resident treatment instead.
Our full guide to tax residency in Australia for 2026-27 walks through the resides test, the domicile test and the 183-day test in detail.
The treaty-country exception (the Addy ruling)
There is one narrow but valuable exception. Following the 2021 Federal Court decision in Addy, a working holiday maker who is genuinely an Australian resident for tax purposes and a national of a country with a non-discrimination article in its tax treaty with Australia can be taxed as a resident — including the $18,200 tax-free threshold. The countries are Chile, Finland, Germany, Israel, Japan, Norway, Turkey and the United Kingdom. See the ATO’s tax rates for working holiday makers page, which confirms the treaty-country condition.
If you’re, say, a German backpacker who spent a full year living in one place and genuinely settled, you may be entitled to resident rates on your income. On $45,000 that’s roughly $3,400 less tax than the WHM schedule (partly offset by the 2% Medicare levy). But the bar is high: you must genuinely satisfy the ATO’s residency tests, not just hold one of those passports — get advice before claiming it.
Getting a TFN
A tax file number is your identifier in the Australian tax system, and you need one to work and to lodge a return. Apply through the ATO’s website as soon as you arrive — it’s free, but allow around 28 days for processing. You’re not legally required to have one, but without it your employer must withhold 45%, so apply early.
WHMs can’t claim tax offsets or Medicare levy adjustments through withholding — anything you’re entitled to is sorted out on your return.
How to lodge your tax return
The Australian tax year runs 1 July to 30 June. If you lodge yourself, you can file any time from 1 July to 31 October for the year just ended; penalties can apply if you miss the deadline. For a straightforward backpacker return the free online lodgement is usually all you need.
You lodge through myGov linked to ATO services. Employer pay data should pre-fill through Single Touch Payroll — check every employer appears, and add missing ones manually from your payslips.
Lodging after you’ve left Australia
You don’t need to be in Australia to lodge. Set up myGov while you’re still here and lodge online from home after 1 July. Two practical warnings from people who’ve been caught out:
- Two-factor authentication. myGov security codes often go to your Australian mobile number. If you’ll change numbers when you leave, switch to the myGov Code Generator app before you fly.
- Leaving before 30 June. If you leave permanently mid-year with no further Australian income expected, you can lodge a paper return early. Otherwise wait and lodge online after 1 July.
Worked examples with 2026-27 figures
Here are two typical scenarios, calculated on 2026-27 rates. You can check your own numbers with an income tax calculator set to the working holiday maker schedule.
Example 1: Six months, $35,000 earned
Ella, from France on a 417 visa, works in hospitality in Melbourne from January to June 2027, earning $35,000. Her employer is registered and withholds 15%: $5,250 over the half-year. Her final liability: 15% × $35,000 = $5,250. No Medicare levy — she’s a foreign resident not entitled to Medicare. Lodging mainly confirms the numbers; if the right amount was withheld, there’s no refund and no bill. An Australian resident on the same income would pay about $2,520 all up (after the tax-free threshold, low income tax offset and 2% Medicare levy) — Ella pays roughly $2,730 more, the price of no tax-free threshold.
Example 2: Full year, $62,000 earned
Jonas, from Denmark on a 462 visa, works the full 2026-27 year across two registered employers, earning $62,000. His final liability:
- 15% × $45,000 = $6,750
- 30% × ($62,000 − $45,000 = $17,000) = $5,100
- Total: $11,850
If his employers withheld correctly, he’s paid $11,850 across the year. A resident on the same income would pay $10,290 (income tax after the offset, plus Medicare levy). Notice how close the two are above $45,000 — the WHM schedule converges with the resident schedule after the first band. The real WHM penalty sits in the first $45,000.
Example 3: The unregistered-employer refund
Tom, from Ireland on a 417 visa, earns $30,000 doing farm work. His labour-hire employer never registered with the ATO and withholds 30%: $9,000. His actual liability is 15% × $30,000 = $4,500. When he lodges, the ATO credits the excess — a refund of roughly $4,500. This is the single biggest source of “tax back” windfalls for backpackers.
Second and third year visas: what changes (and what doesn’t)
To get a second or third year on a working holiday visa you need specified work — currently three months (88 days) in designated industries and postcodes. The eligible industry list and regional rules have changed over time, so check Home Affairs’ current list before counting on a particular job. The key point: specified work is an immigration rule, not a tax rule — your tax rates, TFN and lodgement obligations stay exactly the same.
ABN and freelance side income
Picked up odd jobs on an ABN — web design, handyman work, photography gigs? The 15% WHM rate is built around employment with a registered employer; income that isn’t WHM employment income generally follows your ordinary residency-based rates. For most WHMs (foreign residents) that means 30% from the first dollar, with no employer withholding to soften it — the full amount lands in your final assessment, and you must declare all of it.
This area catches people out precisely because it’s not covered by the 15% rate. If you’re earning meaningful money on an ABN, get a tax agent to check your position — and our guide to side hustle tax in Australia covers deductions and record-keeping.
Super on departure: the 65% DASP rate
Your employer pays 12% super guarantee on top of your wages in 2026-27. When you leave Australia permanently and your visa has ended, you can claim that super back as a Departing Australia Superannuation Payment (DASP) — but for working holiday makers it’s heavily taxed:
| DASP payment component | Ordinary rate | WHM rate |
|---|---|---|
| Tax-free component | Nil | Nil |
| Taxable component – taxed element | 35% | 65% |
| Taxable component – untaxed element | 45% | 65% |
The 65% WHM rate has applied since 1 July 2017 and is a final tax — you can’t get any of it back through a tax return. To put it in perspective: on $7,200 of super from a year of full-time work at $60,000, roughly $1,080 goes to contributions tax inside the fund and 65% of the rest is withheld as DASP tax, leaving you around $2,100. The ATO’s DASP page sets out the rates and the claim process.
Practical tips:
- You can’t claim while you’re still in Australia or while your visa is active. You can prepare the application, but you can only submit it after you’ve left and the visa has ended.
- Don’t wait too long. If you haven’t claimed within 6 months of leaving and your visa ceasing, your fund must transfer the balance to the ATO as unclaimed super. You can still claim it from the ATO afterwards, but it stops earning investment returns in the meantime.
- Claims are free through the ATO’s DASP online system and are generally processed within about 28 days. Third-party services charge for doing the same paperwork — fine if you’ve lost track of multiple funds, but unnecessary for one or two.
- One day on a 417/462 visa taints the lot. The 65% rate applies if you’ve ever held a working holiday visa, including super earned later on other visas.
Our super withdrawal tax guide covers the broader rules, and you can model scenarios with the super calculator.
Common mistakes backpackers make
- Assuming no tax return is needed. If you earned taxable income, lodge — it’s also the only way to get over-withheld tax back.
- Believing “I’ll get all my tax back.” The 15% on your first $45,000 is genuinely owed. Refunds come from over-withholding or deductions — not from the base rate itself.
- Not getting a TFN until the last minute. 45% withholding on every early pay is a cash-flow disaster, even if it reconciles later.
- Forgetting about multiple employers. The 15% band applies to your total income across all employers. Each employer withholds 15% on the first $45,000 they pay you — at higher totals this can under-withhold, leaving you a small bill.
- Ignoring super. Leaving a few thousand dollars in an Australian fund because “it’s too hard” is common — and unnecessary, since the free ATO claim takes minutes.
- Forgetting foreign income. If you’re a tax resident for part of the year (the treaty-country scenario), Australia taxes your worldwide income for that period — see foreign income tax rules.
Tips to maximise your take-home pay
- Apply for your TFN the week you arrive. Free, ~28 days, stops 45% withholding.
- Check every payslip against 15%. If it’s 30% with no explanation, ask about WHM employer registration.
- Keep receipts for work-related expenses. WHMs claim the same deductions as anyone else: work-specific clothing, tools, travel between jobs, donations.
- Consolidate your super into one fund before you leave, then claim it via DASP.
- Start your DASP paperwork before you fly — name and passport mismatches are the top cause of delays.
- Lodge even if you think you owe nothing. The ATO can’t refund you if you never lodge.
FAQ
Do backpackers pay tax in Australia?
Yes. Working holiday makers (417/462 visas) pay a flat 15% on the first $45,000 of income in 2026-27, with no tax-free threshold — tax applies from the first dollar.
Am I a tax resident if I’ve been in Australia over 6 months?
Not automatically. Most backpackers remain foreign residents, and for WHM wages it usually doesn’t matter: WHM income with a registered employer is taxed at WHM rates either way.
Can I get all my tax back when I leave Australia?
No — the 15% base rate is genuinely owed. You get back what was over-withheld (e.g. 30% from an unregistered employer or 45% without a TFN) plus the value of any deductions. Lodge a return; the ATO does the maths.
Can I lodge my tax return from overseas?
Yes. Lodge online via myGov after 1 July for the year just ended. If you leave permanently mid-year with no further Australian income, you can lodge a paper return early instead.
How much super do I get back when I leave?
Working holiday makers face a 65% final withholding tax on the taxable component of their DASP — roughly $2,100 back from $7,200 of super. You can only claim after leaving Australia with your visa ended.
Does a second-year visa change my tax?
No. The 88 days of specified work needed for a second or third year is an immigration requirement. Your tax rates, TFN and lodgement obligations stay exactly the same.
The bottom line
Working holiday maker tax is simpler than it looks once you separate the three moving parts: the 15% rate your registered employer withholds, your final liability settled when you lodge, and the 65% super hit waiting when you leave. Get a TFN early, check your payslips, keep your receipts, sort out myGov before you fly — and lodge your return. The paperwork is what gets you every dollar you’re owed.
