Once you have decided to stay in Australia for over six months and worked during your time here, you could be entitled to a tax refund from the Australian Tax Office (ATO).
If you’re a savvy traveller and follow some thrifty techniques with your work related expenses, you could be able to claim back some tax.
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Once you have decided to stay in Australia for over six months and worked during your time there you are entitled a tax return from the Australian government. This is the amount of tax you have been paying through your employment that you can claim back in a tidy sum. This is one of the perks of backpacking as the local residents still have to pay their taxes so you should consider how and when to claim it.
One of the requirements on the Working Holiday Visa is that you are only allowed to work up to six months for each employer and you will be taxed. Another requirement for working in Australia is that you have to apply for a TFN (tax file number) before you start your first job to ensure that you will be taxed correctly, you can even apply for one once you receive your visa.
You do not have to have a TFN but if you don’t you will pay more tax. Usually, if you remain in Australia for over half the year (183 days or more) you will be considered a foreign resident for tax purposes and qualify for the tax-free threshold. You should be able to claim back the tax you overpaid at the end of the tax year from 30th June.
Obviously this has to be done officially and you have to qualify as an foreign resident for tax purposes. You will need your TFN and documents from your employers which show how much you have been paid. If you are not going to be in Australia by the end of the fiscal year on 30th June you should consider arranging an early tax assessment. When you’re ready to leave Australia, we’ll help you file your tax return or if you stay, we’ll help you file for a tax refund.
You will need to keep your payslips as each company should be able to provide a PAYG Payment Summary and Statement of Earnings (also known as a Final Pay Slip). These documents are provided by employers to show how much they paid you for the financial year and how much they withheld from the payments. Failure to provide them will result in money being taken away from your return. Certain costs can also be written off as expenses which includes union fees, green card courses, safety equipment, stationery, uniform and laundry receipts. Of course, try not to over-exaggerate on your expenses as it’s better to be safe than have your tax filing questioned by the Australian Taxation Office.
When you begin to work in Australia you should give your employer a TFN (Tax File Number) declaration. This helps them work out how much tax to withhold from your pay and your employer will check which working holiday visa you are on, which will likely be the subclass 417. Your employer is also required to register with the Australian Taxation Office as an employer of backpackers. If your employer is registered then fine, they will withhold tax from your pay at 15% on the first $37,000 of income. If they are not, they must withhold tax from your pay using foreign resident tax rates which start at 32.5%. Not ideal but you will be able to claim that back.
It should take between 7-14 days to get your tax returns back. However, it may take up to six weeks if you are leaving the country and filing your final tax income because early requests are filed first.
You will need to keep your payslips as each company should be able to provide a PAYG Payment Summary and Statement of Earnings (also known as a Final Pay Slip). These documents are provided by employers to show how much they paid you for the financial year and how much they withheld from the payments. Failure to provide them will result in money being taken away from your return. Certain costs can also be written off as expenses which includes union fees, green card courses, safety equipment, stationery, uniform and laundry receipts. Of course, try not to over-exaggerate on your expenses as it’s better to be safe than have your tax filing questioned by the Australian Taxation Office.