Firstly, welcome to Australia! Australia is a popular destination for backpackers from all around the world. Hanging in Australia and travelling around this beautiful big country is a great way to pass a year or two! However, it isn’t cheap, so you’ll probably need a job or two at some point. This blog will help you understand backpacker tax in Australia.
When you work in Australia you do get taxed and need to lodge a tax return for every financial year you have earnings in Australia. The financial year runs from July 1 to June 30 inclusive.
The Australian government introduced a backpacker tax to provide specific rules for working backpackers in Australia. Read on for more about backpacker’s tax, how to lodge a tax return in Australia, and Superannuation for backpackers.
Australian Backpacker tax
The backpacker tax rates in Australia do not have a tax-free threshold as Australian residents receive. That means you get taxed your first dollar of earnings in Australia. Backpackers on a 417 visa (a working holiday visa) and a 462 visa (a work and holiday visa) pay 15% of their earnings up to $45,000. Anything above this threshold is taxed at ordinary rates as well.
The working holiday maker tax rates are set out below.
| Taxable income | Backpacker Tax on this income |
| 0 – $45,000 | 15% |
| $45,001 – $120,000 | $6,750 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $31,125 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $53,325 plus 45 cents for each $1 over $180,000 |
For example, if a backpacker on a 417 visa earns $30,000 through various jobs in Australia, they would be taxed 15% on their earnings which is $4,500.
As always with any tax system, the more you earn, the more tax you pay! Keep an eye on your wages as when you jump up to over $45,000 in taxable income your tax rate more than doubles.
How to file a backpacker tax return in Australia
To file a tax return or lodge a tax return you have a few options. You can do it yourself through the ATO website, or alternatively create an account with an online tax agent like One Click Life. It will only take 5 minutes to lodge and can be done from your mobile phone. An online tax return is the favoured option for most Aussies and backpackers!
You need to file an online tax return for every financial year that you have earnings or had a tax file number in Australia. When you leave Australia, you need to complete a final tax return.
Superannuation for backpackers
Superannuation is a retirement savings system in Australia, where employers are required to pay a percentage of their employees’ earnings into their nominated superannuation fund. This is also called a pension fund in other countries. If you don’t nominate a superannuation fund (or superfund for short), your employer will provide you with one. The current rates of superannuation in Australia for residents and backpackers are set out below. This means that your employer would pay $3,300 into your superfund if you earned $30,000 while you were working in Australia FY24.
| Period | Backpacker super rate |
| 1 July 2023 – 30 June 2024 | 11.0% |
| 1 July 2024 – 30 June 2025 | 11.5% |
| 1 July 2025 – 30 June 2026 (onwards) | 12.0% |
When you leave Australia, backpackers can claim back their super. Read below for more information on this topic.
What you need to do when you leave Australia
☑️Lodge a final tax return
☑️Claim back your super
Final backpacker tax return
Backpackers will need to lodge a final tax return when they depart Australia. This can be done at any time, just let us know you are leaving and the tax professionals at One Click Life can get this sorted for you.
Claim back your super
When backpackers leave Australia, they may be able to access their superannuation through the Departing Australia Super Payment (DASP). When you leave Australia and claim your super back you are charged a 65% tax on your superannuation balance. For example, if a backpacker earned $30,000 in Australia and their employer paid $3,150 into their superannuation fund, they would be charged $2,047.50 leaving $1,102.50 to claim back. The forms for this are on the ATO website, or your new online tax agent can assist.
Backpacker tax in Australia
So, let’s summarise this quickly… Backpackers who work in Australia are subject to the backpacker tax and the superannuation system. Generally, that involves paying 15% tax unless you earn over $45,000 and your employer will pay an additional 10.5% percentage of super into your superfund. Remember, when you leave, you will need to lodge a final tax return and you can claim back your super when you depart Australia. If you do access your super through DASP, you will have to pay 65% tax on your super balance.
As a backpacker, you do need to understand these tax and superannuation rules when working in Australia to avoid any unexpected fines or penalties imposed by the Australian Taxation Office (ATO). One Click Life is always here to help!
One Click is here to help you!
One Click Life makes it simple to track and organise all your life’s admin in a single place. Operated by tax professionals, One Click Life allows you to complete your online tax return at the click of a button.
Dealing with an online tax adviser is the easiest way to complete your tax return. Why wouldn’t you use one if you could claim your online tax agent fees and online tax return as a tax deduction? We do more than just tax! One Click Life can help with your Will, Mortgage, and Health Insurance, so you can spend time on things that matter to you.