Positive changes to the tax arrangements of Working Holiday visa holders.

Many of you may be familiar with the Working Holiday Maker Program.  The program is popular because it allows visa holders to travel around Australia and obtain short-term work experience with Australian employers, for a maximum duration of up to 24 months.

While there were previous movements to change the tax residency status of Working Holiday visa holders resulting in a much higher tax rate on every dollar earnt; the Australian Government has since recognised the importance of the program to Australia’s tourism industry and labour markets; particularly within our hospitality, agriculture, tourism, and horticultural areas.

As such, from the 1st January 2017, only the first $37,000 of income earnt as a Working Holiday Maker, will be taxed at 15%, with the balance taxed at ordinary rates.  The good news is that this equates to a significant tax savings for the visa holder, leaving them with more money in their pockets for their Australian holiday.

Written by: Yi Main Cheong | Business Development Manager for the ISA Group | MARN: 1385224 | advice@isa.com.au