Tax Rules for Working Holiday Makers and Foreign Residents

Tax Rules for Working Holiday Makers

Special Tax Rates: The first $45,000 of income is taxed at 15%. Income above this is taxed at ordinary rates for residents.
TFN Requirement: You need a Tax File Number (TFN) to avoid higher withholding rates.
No Tax-Free Threshold: The tax-free threshold does not apply to working holiday makers.
Superannuation Refunds: Eligible for a refund of super contributions when leaving Australia, subject to tax.

Tax Rules for Foreign Residents

Higher Tax Rates: Foreign residents pay 32.5% tax on every dollar of income up to $120,000, with higher rates applying above this.
Residency Status Impact: Non-residents are not eligible for tax-free thresholds or certain offsets.
Reporting Income: Must report all Australian-sourced income, including wages, rental income, and capital gains.

Working holiday makers and foreign residents have specific tax obligations based on their residency status and income source.

The Cado Tax app simplifies tax filing for non-residents and ensures compliance with Australian tax laws.

FAQs

How do I determine my residency status for tax purposes?

Residency is based on your visa type, time spent in Australia, and whether Australia is your permanent home. Use the ATO’s residency tool for guidance.

Do working holiday makers need to lodge a tax return?

Yes, if you’ve earned income in Australia, lodging a tax return ensures you meet your obligations and can claim any overpaid tax.