If you are on a working holiday visa in Australia, or planning to come on one, tax is probably not the most exciting thing on your mind. But it is worth getting right. The rules are specific to your visa type, the tax rate (often called the backpacker tax in Australia) is different from what Australian residents pay, and there are a few areas where working holiday makers get seriously caught out.
This guide covers what you need to know: the rate that applies to you, what happens to your superannuation when you leave, whether you need to lodge a tax return, what the Medicare levy means for you, and what to do if you have a HECS-HELP debt from previous study in Australia.
If you want the quick answer first, use the estimator below. It gives you a rough sense of likely tax, refund risk, DASP net position, and whether anything looks messy enough to justify advice.
Working Holiday Tax Estimator (2025–26)
Quick estimate only. Uses 2025–26 rates and thresholds. Useful for spotting refund risk, DASP expectations, and obvious red flags.
Estimated WHM tax
Possible refund
Estimated DASP net
Extra withholding if employer not WHM-registered
If the result throws up a warning, keep reading. The sections below explain the rules in plain English.
Quick links: tax rates | lodging your return | getting a TFN | super and DASP | HELP debt | UK, Germany and other NDA countries
If the estimator suggests a review, or you have multiple employers, visa changes, prior HECS debt, or treaty questions, book a consultation before lodging.
Which Visas Are Working Holiday Visas?
Australia has two working holiday visa subclasses.
Subclass 417, Working Holiday visa. Available to passport holders from 19 countries: the United Kingdom, Belgium, Canada, Cyprus, Denmark, Estonia, Finland, France, Germany, Hong Kong SAR, Ireland, Italy, Japan, the Republic of Korea, Malta, the Netherlands, Norway, Sweden, and Taiwan. The standard age range is 18 to 30 at the time you apply. For passport holders from the UK, Canada, France, Ireland, Italy, and Denmark, the upper age limit is 35. The visa is granted for up to 12 months, and you can extend it to a second and third year by completing a set number of weeks of specified regional work, such as agricultural, harvest, or construction work in a designated regional area. UK passport holders who apply on or after 1 July 2024 do not need to meet the specified work requirement.
Subclass 462, Work and Holiday visa. Open to citizens of around 30 other countries, including the USA, Singapore, Malaysia, Indonesia, Thailand, China, Vietnam, Argentina, Spain, Portugal, and several others. Eligibility requirements are slightly different: you generally need relevant qualifications or prior study, and some countries require a sponsorship letter from your government. The 462 is for those aged 18 to 30 and allows you to stay and work in Australia for up to 12 months, with extensions available on the same regional work basis.
The tax rules for both subclasses are the same. Whether you hold a 417 or a 462, the same working holiday maker tax rates apply.
Are You a Tax Resident or Non-Resident While on a Working Holiday Visa?
Most working holiday makers are treated as non-residents of Australia for tax purposes. This matters because residents and non-residents generally have different tax obligations: residents are taxed on worldwide income and can claim a tax-free threshold, while non-residents are taxed only on Australian-source income.
There is something important to understand here, though: the working holiday maker tax rate applies to your income specifically because of your visa type, regardless of whether you are technically a resident or non-resident. The Income Tax Rates Amendment (Working Holiday Maker Reform) Act 2016 created a separate tax table in the Income Tax Rates Act 1986 for “working holiday taxable income,” and the ATO applies it to income earned in Australia while you hold a 417 or 462 visa.
In a small number of cases, typically people who have extended their working holiday over two or three years, established a settled life in Australia, and have no permanent home abroad, the ordinary residency tests in the ATO’s Taxation Ruling TR 2023/1 could technically apply. This is genuinely uncommon and turns on specific facts. If you have been in Australia for more than 12 months and do not have an established permanent home in another country, it is worth getting advice on your residency position. But for the vast majority of working holiday makers on a standard 12-month visa, you are a non-resident for tax purposes.
Working Holiday Maker Tax Rates in 2026
The working holiday maker rate applies from the first dollar you earn in Australia. There is no tax-free threshold.
The 15% Rate
For income up to $45,000, you pay 15 cents in every dollar. This flat rate covers most working holiday makers, given the large majority earn well under $45,000 during their time in Australia.
If your employer is registered with the ATO as a working holiday maker employer, they will withhold tax at 15% automatically. This is the correct and expected rate.
If your employer is not registered, and this does happen, particularly with smaller businesses or casual arrangements, they are required by law to withhold at the foreign resident rate of 30% on the first $45,000. That is double what you should be paying. If you suspect your employer has not registered, it is worth asking them directly. If you have been over-withheld all year, you can claim the difference back through your tax return.
What Happens Above $45,000?
The 15% rate only applies to the first $45,000. If you earn more, and some working holiday makers in higher-paying roles do, the rates step up:
- $45,001 to $135,000: 30%
- $135,001 to $190,000: 37%
- Over $190,000: 45%
These thresholds reflect the Stage 3 tax cuts that took effect from 1 July 2024. For most backpackers and seasonal workers, the 15% rate covers everything they earn. But it is worth knowing the thresholds if you are working full-time in a professional role.
Do You Need to Lodge an Australian Tax Return?
Yes, in nearly all cases. If you have earned any income in Australia during the financial year (1 July to 30 June), you are required to lodge an Australian income tax return.
The standard lodgement deadline is 31 October. If you are leaving Australia permanently before 30 June, you may be able to lodge an early paper tax return. The ATO restricts early lodgement to people who will not derive further Australian-source income (other than interest, dividends and royalties) after leaving, and you cannot use myTax for an early return — it must be a paper return, which generally takes around 50 business days to process. People with HELP, VET Student Loan or similar repayment obligations are usually directed to lodge during the normal lodgement period instead.
If you do qualify and lodge early, the reconciliation is often worth doing. If your employer withheld tax at 30% instead of 15% (because they were not registered as a WHM employer), the difference comes back to you as a refund when you lodge. For a working holiday maker who earned $40,000 and was taxed at the wrong rate all year, the refund could be around $6,000. That is not nothing.
Even if your employer withheld at 15%, your tax return still reconciles the year. Refunds or shortfalls can arise where the wrong withholding table was used, no TFN was quoted at the start, you can claim deductible work-related expenses, you had multiple employers, or your income crossed a threshold.
You can lodge through myTax (via myGov) or through a registered tax agent. If your tax affairs are straightforward, one employer, working holiday income, no investments, myTax is perfectly adequate.
Getting Your Tax File Number (TFN)
You do not have to have a Tax File Number (TFN). But without one, your employer must withhold tax at 45%, the highest marginal rate. That is far more than you should be paying, and you can only recover the excess by lodging a tax return.
Getting a TFN is free and straightforward. You apply through the ATO’s website at ato.gov.au/tfn. You will need your passport and visa details. The process takes a few minutes online, and the ATO typically issues a TFN within 28 days.
Give the TFN to your employer when you start work, do not wait until your first pay cycle.
Medicare Levy, Do You Pay It?
Most working holiday makers do not pay the Medicare levy. The levy is 2% of taxable income and funds the public health system; it is generally only payable by people entitled to full Medicare benefits. Working holiday makers usually are not, so the levy does not apply, but the exemption is not automatic. To claim it, you apply to Services Australia for a Medicare Entitlement Statement covering the period you were not eligible for Medicare and include the exemption in your tax return.
If you are from a country with a bilateral health care agreement with Australia, you are entitled to emergency and essential medical treatment under the reciprocal arrangement. Countries with such agreements are the UK, Republic of Ireland, New Zealand, Sweden, the Netherlands, Belgium, Finland, Italy, Malta, Norway, and Slovenia. The reciprocal cover is narrower than full Medicare entitlement, so being from one of these countries does not, on its own, change your Medicare levy position.
One exception worth flagging: if you are claiming Australian tax residency in an Addy/non-discrimination case (see below), your Medicare entitlement and levy position need to be considered separately, because the resident tax rate, the levy, and your Medicare entitlement do not all turn on the same test.
Superannuation: Contributions and What Happens When You Leave
What Your Employer Contributes
While you are working in Australia, your employer is required to pay superannuation contributions on your behalf. The Superannuation Guarantee rate for the 2025-26 financial year is 12% of your ordinary time earnings. This is the final scheduled increase under current legislation.
There is no minimum earnings threshold. Since 1 July 2022, the old $450-per-month requirement was removed. Every employee, including casual workers on a working holiday visa, is entitled to super contributions from their first dollar of earnings. Even if you only work for a few weeks, super should be accumulating.
Keep track of where your super is being paid. You can do this through your myGov account or via the ATO’s find my super tool at ato.gov.au.
Departing Australia Superannuation Payment (DASP), How to Claim It
When your visa expires and you leave Australia, you can claim your accumulated superannuation as a Departing Australia Superannuation Payment (DASP). This is not automatic; you need to apply for it.
You apply through the ATO’s online DASP application at ato.gov.au. You will need your TFN, evidence that your visa has ceased, and your bank account details for the transfer. Most working holiday makers apply for DASP after they have left Australia, once the visa has expired or been cancelled. The process is entirely online and can be completed from overseas.
How Much Tax Is Withheld on DASP?
This is the part that catches almost every working holiday maker off guard.
The DASP withholding tax rate for working holiday makers is 65% on the taxable component of your superannuation balance (covering both the taxed and untaxed elements). For every dollar in your super fund, approximately 65 cents goes to the ATO and you receive around 35 cents.
To put that in concrete terms: if you accumulated $8,000 in superannuation during your year in Australia, you would receive approximately $2,800 after the 65% withholding is deducted.
In 2026, the DASP process works the same way it has since 1 July 2017, when this rate was implemented through amendments to the Superannuation (Departing Australia Superannuation Payments Tax) Act 2007, including the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Act (No. 2) 2016 (Act No. 94 of 2016). It is significantly higher than the DASP rate that applies to other temporary visa holders (35% on the taxed element, 45% on the untaxed element). Many working holiday makers are surprised by this, and understandably so, it is a substantial deduction.
That said, the alternative, leaving the super fund entirely and never claiming DASP, is generally worse. If you do not claim, your fund may eventually transfer your balance to the ATO as unclaimed super money after you have left Australia and your visa has ceased. It will no longer remain invested in the original super fund, and when it is ultimately paid to you as DASP, the same withholding rules apply. It is almost always worth applying for DASP.
What About HECS-HELP Debt?
Working holiday makers, as temporary visa holders, are generally not eligible to take out new HELP loans. HELP loans (including HECS-HELP and FEE-HELP) are restricted to Australian citizens and certain narrow categories of visa holders, primarily permanent humanitarian visa holders, eligible former permanent humanitarian visa holders, Pacific Engagement Visa holders, and some long-term New Zealand Special Category Visa holders. Ordinary permanent residents and international students on temporary visas are not eligible for HELP loans, though permanent residents can still take a Commonwealth-supported place if they pay the student contribution upfront.
Existing HELP debts can still matter, however. If you already have a HELP debt from an earlier period of eligible Australian study, that debt does not disappear when you switch visas or leave Australia. It continues to exist in the Australian tax system, indexed annually on 1 June to the lower of CPI or wage growth.
The HELP repayment system changed substantially in 2025-26. The minimum repayment income threshold rose from $54,435 in 2024-25 to $67,000 in 2025-26. Repayments are also now calculated on a marginal basis, meaning the repayment percentage applies only to the portion of your income above $67,000, rather than to your entire income once you cross the threshold. This was introduced by the Universities Accord (Cutting Student Debt by 20 Per Cent) Act 2025, which also delivered a one-off 20% reduction to existing HELP debt balances as at 1 June 2025. The $67,000 threshold and the repayment bands above it are indexed annually, so for income years from 2026-27 onwards the relevant figures will be slightly different. Check the ATO’s current published rates before relying on a specific number.
If your repayment income exceeds the threshold, compulsory HELP repayments will be calculated and applied through your tax return, regardless of your current visa type. This catches some people off guard, particularly dual nationals or former permanent humanitarian visa holders who studied in Australia in the past and have since returned on a 417 visa in a higher-paying job. If you have an existing HELP debt and expect to earn above $67,000 this financial year, budget for the repayment.
For more detail on HELP obligations when living or working overseas, see our guide on HECS-HELP Debt Overseas.
Switching Visas or Staying On, What Changes for Tax?
If you extend your working holiday to a second or third year, the working holiday maker rates continue to apply as long as you hold a 417 or 462 visa.
If you switch to a different visa — a student visa, a skilled work visa, a partner visa, or any other temporary or permanent visa — the WHM-specific rate no longer applies. Your tax treatment will be determined by your new visa type and your residency status.
If your facts support Australian tax residency after a visa change or longer-term settlement, the ordinary resident tax rules apply, including the resident tax scale, tax-free threshold, and Medicare levy settings. Permanent residence or citizenship is relevant background, but it is not itself the income-tax residency test, which turns on the ordinary concepts test (and the alternative statutory tests) discussed in TR 2023/1. For more on what that transition looks like from a tax perspective, see our guide on Returning to Australia: Tax Residency Consequences.
If you plan to stay in Australia longer-term and want to understand superannuation contributions as a resident, our Superannuation for Australian Expats guide covers the relevant rules.
UK, German, Japanese and Other NDA Country Nationals: The Addy Decision
On 3 November 2021, the High Court of Australia decided in Addy v Commissioner of Taxation [2021] HCA 34 that a UK citizen on a working holiday visa, who was also an Australian resident for tax purposes, was entitled to be taxed at resident rates under the non-discrimination article (Article 25) of the Australia-UK Double Tax Convention. The Court found that the 15% backpacker tax rate was more burdensome than the rate that would have applied to an Australian national in the same circumstances, which contravened the treaty.
That decision still applies. As at the ATO’s most recent guidance, the Addy result applies if you are both:
- a national of an eligible non-discrimination article (NDA) country, currently the United Kingdom, Germany, Japan, Finland, Norway, Chile, Turkey, or Israel; and
- an Australian resident for tax purposes for the relevant period.
The catch is the residency limb. In Addy itself, the High Court proceeded on the basis that the taxpayer was an Australian resident for tax purposes for the relevant period; residency had been accepted earlier in the litigation (initially by the Commissioner at the objection stage, and then again on appeal under the 183-day test at the Full Federal Court). The High Court granted special leave only on the treaty discrimination point, not on residency. Addy is therefore authority for the treaty outcome where residency is already established; it does not stand for the broader proposition that most working holiday makers who stay for an extended period will be Australian tax residents.
The ATO’s view is that most working holiday makers will not satisfy the ordinary concepts residency test, because they come to Australia for the purpose of a holiday rather than to establish a settled, permanent life. If you think your facts go beyond that — for example, you have been here for a long period on multiple WHM visas, you are working full-time in a settled role, and your ties to Australia genuinely outweigh your ties to your home country — your residency position may be worth examining.
If you believe you may meet the residency test, do not assume your employer will withhold at resident rates. They will not; they are required to keep using the 15% WHM rate unless the ATO directs them otherwise via a PAYG variation. You would need to lodge your return as a resident, declare your nationality, and be prepared for the ATO to review your residency claim. If the ATO does not accept the residency position, it may deny resident-rate treatment and assess the income under the WHM rules. Depending on what was withheld, refunded or claimed, that could mean a reduced refund, additional tax payable, Medicare levy consequences, or interest. In practice most Addy claims are refund claims where the WHM rate was applied at source and the resident position is asserted on lodgement.
It is also worth knowing what has not happened: Australia has not amended the Australia-UK Tax Convention to override the Addy result. The only treaty Australia has so far renegotiated to expressly exclude WHM tax from the non-discrimination article is the Iceland Convention (which entered into force in November 2023). Treaties signed since then, such as the Portugal Convention signed in November 2023 and not yet in force, also exclude WHM tax from the non-discrimination article. But for the existing treaties with the UK, Germany, Japan, Finland, Norway, Chile, Turkey, and Israel, the Addy position still applies for nationals of those countries who are Australian tax residents.
This is a fact-specific area and worth getting advice on if you think it applies to you. The potential refund can be material, but it is paired with the ATO’s willingness to review and challenge residency claims.
Common Mistakes Working Holiday Makers Make
Not getting a TFN at the start. Waiting until payroll asks for it means weeks of 45% withholding. Apply before you start work.
Assuming 15% means the employer’s calculation is correct. If your employer is not registered as a WHM employer, you may be paying 30%. Check your payslips and compare against the rate that should apply.
Not lodging a tax return. Many working holiday makers assume they will not get a refund and skip lodgement entirely. Over-withholding is common, and the ATO does not chase you to return your money, you have to ask for it.
Forgetting about super, or giving up on claiming DASP. If you worked for 12 months in Australia, you have superannuation. Even after the 65% DASP withholding, the net amount is worth claiming. Do not walk away from it.
Thinking an old HELP debt disappears. If you had a HELP debt from an earlier period of eligible Australian study and earn enough during your working holiday to trigger compulsory repayment, those repayments will show up in your tax return. The 2025-26 threshold is $67,000, and only the income above it counts under the marginal repayment system.
Assuming residency or visa duration changes your tax rate. Some working holiday makers believe they pay less tax if they are here for more than 183 days. This is a misunderstanding. The 15% WHM rate applies regardless of how long you are in Australia. Residency rules and the WHM tax rate are separate questions, with the narrow Addy exception described above.
What to Do Next
If your working holiday in Australia was straightforward, one or two employers, income under $45,000, no prior study debt, you can likely manage your own tax return through myTax without too much difficulty.
If your situation is more involved — you have been in Australia for two or more years, you switched visas mid-way through a financial year, you have income from multiple sources, you have an old HELP debt, you are a national of an NDA country and think you may be an Australian tax resident, or you are unsure about your residency status — it is worth talking with a tax adviser who understands the working holiday maker rules specifically.
We work with clients whose Australian tax situation started during a working holiday and became more complex over time. If that sounds like you, book a consultation and we can work through your situation together.
This guide is current as at May 2026 and is intended as general information only. Your specific tax obligations depend on your individual circumstances, and tax law can change. This is not legal or financial advice, please seek professional advice for your specific situation.
