Working Holiday Maker Tax Rate 2025-26

What Is the Working Holiday Maker Tax Rate?

Working holiday makers pay a flat 15% tax rate on the first $45,000 of assessable income earned in Australia during FY2025-26.

This special rate applies to holders of subclass 417 (Working Holiday) and subclass 462 (Work and Holiday) visas. Unlike Australian residents, working holiday makers do not receive the $18,200 tax-free threshold, the "Low Income Tax Offset" (LITO), or the "Low and Middle Income Tax Offset" (LAMITO). Every dollar earned from $1 is taxable at 15%. Above $45,000, standard non-resident marginal rates apply at 30%, 37%, and 45% depending on the income tax bracket.

The 15% flat rate was introduced in January 2017 after the "backpacker tax" debate. The rate was a compromise between the original proposal of 32.5% and the 0% tax-free threshold that residents enjoy. The rate has remained at 15% since the 2017-18 financial year through to FY2025-26. Use our Income Tax Calculator to model your exact take-home pay under the WHM tax schedule.

What Are the Working Holiday Tax Brackets for FY2025-26?

Working holiday maker income tax brackets use a 4-tier structure starting at 15% on the first $45,000 and escalating to 45% above $190,000.

The first bracket aligns with the resident $45,000 threshold where the 30% marginal rate begins. From $45,001 onwards, WHM rates mirror non-resident tax rates exactly. For a full breakdown of how Australian income tax brackets work for all residency types, see our Tax Brackets Guide.

Who Is Classified as a Working Holiday Maker?

A "Working Holiday Maker" is any individual holding a subclass 417 or subclass 462 visa, regardless of whether they meet the ATO's standard residency test.

The WHM tax classification overrides the normal resident or non-resident determination. A backpacker who has lived in Australia for 11 months and passes the 183-day residency test still pays 15% on the first $45,000 — not the resident rates with the tax-free threshold. The classification is determined solely by visa subclass, not by days spent in the country, accommodation arrangements, or intention to remain.

Subclass 417 vs 462: What Is the Difference?

Both visa subclasses receive identical tax treatment. The 15% rate applies from the date the visa is granted until the date it ceases, including any bridging visa period while a substantive visa application is pending.

When Does the WHM Classification End?

The WHM tax rate ceases on the day the 417 or 462 visa expires, is cancelled, or the holder transitions to a different visa subclass. A backpacker who switches to a student visa (subclass 500), employer-sponsored visa (subclass 482), or partner visa (subclass 820) is taxed under standard resident or non-resident rates from that date forward. Income earned before the visa change remains taxed at WHM rates for that portion of the financial year.

Do Working Holiday Makers Pay Medicare Levy?

Working holiday makers are exempt from the 2% Medicare levy because they are classified as non-residents for Medicare purposes.

WHM visa holders are not eligible for Medicare benefits under the reciprocal health care agreements (with the exception of those from the United Kingdom, Ireland, Belgium, Finland, Italy, Malta, the Netherlands, New Zealand, Norway, Slovenia, and Sweden). Even backpackers from these 11 reciprocal countries do not pay the Medicare levy — the exemption applies to all WHMs regardless of country of origin. The "Medicare Levy Surcharge" (MLS) also does not apply to WHMs.

This exemption means the effective tax rate on a $45,000 income is exactly 15% ($6,750), with no additional Medicare levy on top. By comparison, an Australian resident earning $45,000 pays $4,288 in income tax plus $900 in Medicare levy (before LITO), totalling $5,188. For more detail on how the levy affects residents, see our Income Tax Calculator.

How Much Tax Does a Working Holiday Maker Pay on $45,000?

A working holiday maker earning $45,000 in FY2025-26 pays $6,750 in tax, resulting in take-home pay of $38,250 ($736 per week).

Step-by-Step Calculation

The employer also pays $5,400 in superannuation (12% of $45,000) on top of gross salary. This super is claimable via DASP after departure. For comparison, an Australian resident earning $45,000 takes home approximately $40,512 after income tax and Medicare levy (with LITO applied) — $2,262 more than a WHM at the same salary.

WHM vs Resident vs Non-Resident Tax Comparison

At incomes below $18,200, WHMs pay more tax than residents (who pay $0 due to the tax-free threshold). Between $18,200 and approximately $37,000, the WHM rate is still higher than resident rates. Above approximately $37,000, WHMs pay less than non-residents but more than residents. Use our Take-Home Pay Calculator to compare scenarios at your specific salary.

How Does Superannuation Work for Working Holiday Makers?

Working holiday makers receive superannuation at the standard 12% SG rate in FY2025-26, and can claim their balance back via a "Departing Australia Superannuation Payment" (DASP) after leaving the country.

Employers pay the superannuation guarantee on top of a WHM's ordinary time earnings, identical to any other employee. There is no minimum earnings threshold — the $450-per-month threshold was removed on 1 July 2022. A backpacker earning $45,000 accumulates $5,400 in super over the year across one or more super funds.

What Is the DASP Tax Rate?

The DASP tax rate for working holiday makers is 65% on the taxed element of the super balance. This rate is significantly higher than the 38% rate that applies to other temporary residents. On a $5,400 super balance, the DASP payment after tax is $1,890. While 65% taxation appears steep, the alternative is forfeiting the entire balance to the ATO's unclaimed super fund after 6 months of visa expiry.

How to Apply for DASP

1. Leave Australia and confirm your visa has expired or been cancelled (check via VEVO)
2. Consolidate multiple super accounts into one fund via myGov (optional, but reduces paperwork)
3. Apply online through the ATO's DASP application portal at ato.gov.au
4. Provide your passport, visa details, TFN, and super fund membership numbers
5. The ATO processes claims within 28 business days of receiving a complete application

DASP claims must be lodged after departure. Applications submitted while still in Australia on a valid visa are rejected. For a deeper understanding of super guarantee obligations, see our Superannuation Guide.

What Are the Employer Obligations for Working Holiday Makers?

Employers hiring working holiday makers must register with the ATO as a WHM employer and withhold tax at the correct 15% rate from the first dollar of income.

Registration and Withholding Requirements

Employers must complete 4 specific obligations when employing WHMs:

• Register as a WHM employer through the ATO Business Portal or by phoning 13 28 66 — registration is free and takes effect immediately
• Withhold tax at 15% on the first $45,000 of income using the WHM PAYG withholding tax tables, not the standard employee tables
• Verify visa status through the Visa Entitlement Verification Online (VEVO) system before the employee starts work
• Pay superannuation at 12% on ordinary time earnings, with payments due quarterly within 28 days of each quarter end

Penalties for Non-Compliance

Employers who fail to register or who apply incorrect withholding rates face administrative penalties of up to $1,110 per instance under the Taxation Administration Act 1953. The ATO also conducts targeted compliance audits in industries with high WHM employment, including agriculture, hospitality, meat processing, construction, and tourism. Employers in these sectors report to the ATO via Single Touch Payroll (STP), which flags discrepancies between visa type and withholding rate automatically.

How Do Working Holiday Makers Lodge a Tax Return?

Working holiday makers lodge a tax return through myTax (the ATO's online portal) for each financial year in which they earned Australian income, even after departing the country.

Step-by-Step Process

1. Create a myGov account and link it to the ATO — you need your TFN, bank details, and a recent payment summary or income statement from your employer
2. Select "non-resident" as your residency status when prompted (WHMs are treated as non-residents for tax purposes)
3. Verify your income — your employer's STP data pre-fills in myTax from mid-July each year
4. Claim deductions for work-related expenses such as protective clothing, tools, travel between work sites, and sun protection for outdoor work
5. Submit the return — the ATO processes most WHM returns within 12 business days
6. Receive your refund via direct deposit to an Australian bank account or a nominated overseas account

The deadline for lodging is 31 October following the end of the financial year (e.g., 31 October 2026 for FY2025-26 income). WHMs who have already left Australia can still lodge online. A registered tax agent can lodge on your behalf with an extended deadline, typically to 15 May of the following year. For general guidance on tax returns, see our Tax Refund Guide.

What Changed for Working Holiday Makers in FY2025-26?

The WHM 15% flat rate on the first $45,000 is unchanged in FY2025-26, but the superannuation guarantee rate increased from 11.5% to 12% from 1 July 2025.

The SG increase means a backpacker earning $45,000 receives $5,400 in super contributions in FY2025-26, compared to $5,175 in FY2024-25 — an extra $225. However, with the DASP tax rate at 65%, the net DASP payout increases by only $79 (from $1,811 to $1,890). The Stage 3 tax cuts that took effect on 1 July 2024 for residents did not change WHM rates, as the 15% flat rate operates independently of the standard income tax bracket structure.

What Are Common Mistakes Working Holiday Makers Make?

The most common WHM tax mistake is claiming the tax-free threshold on the TFN declaration form, which results in under-withholding and a tax debt at lodgement.

• Ticking "yes" to the tax-free threshold on the TFN declaration — WHMs are not entitled to the $18,200 threshold, and selecting it causes the employer to under-withhold tax. The backpacker then owes a lump sum when they lodge their return.
• Not providing a TFN within 28 days — without a TFN, the employer withholds at the top marginal rate of 45% from dollar one. Applying for a TFN at a post office or online takes approximately 10 business days.
• Failing to lodge a tax return — backpackers who leave Australia without lodging may miss out on a refund if their employer over-withheld. The ATO retains overpaid tax until a return is lodged.
• Not checking employer WHM registration — if the employer is unregistered, 30% is withheld instead of 15%. Backpackers can verify registration by asking their employer for their WHM registration number.
• Waiting too long for DASP — unclaimed super is transferred to the ATO's lost super fund after the visa has been expired for 6 months. While the funds remain claimable, the process becomes slower and more complex.

Related Resources

These Australian tax calculator tools and guides provide additional context for working holiday makers planning their finances.

• Income Tax Calculator — model your take-home pay under WHM, resident, or non-resident tax schedules
• Non-Resident Tax Rates — understand the rates that apply above $45,000 for WHMs and for other temporary visa holders
• Tax Brackets Guide — complete FY2025-26 income tax bracket tables for all residency types
• Superannuation Guide — how the 12% SG rate works, contribution caps, and employer obligations
• Tax Refund Guide — step-by-step instructions for lodging your Australian tax return and claiming deductions
• Take-Home Pay Calculator — calculate your net pay after tax, super, and deductions at any salary level

Frequently Asked Questions