Working Holiday Maker Tax Rate 2026-27

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 FY2026-27.

The WHM 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 or the "Low Income Tax Offset" (LITO). 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% rate residents pay up to the tax-free threshold. The rate has remained at 15% since the 2017-18 financial year through to FY2026-27. 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 FY2026-27?

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.

For most WHMs, tax residency does not change the rate. A WHM who is an Australian resident for tax purposes still pays 15% on the first $45,000 instead of the resident rates with the tax-free threshold. The one exception follows the High Court's 2021 decision in Addy v Commissioner of Taxation: if you are an Australian resident for tax purposes and a national of an eligible non-discrimination article (NDA) country (Chile, Finland, Germany, Israel from 2020-21, Japan, Norway, Turkey or the United Kingdom), you pay the lower of the WHM tax and the tax a resident Australian national pays on the same income. Your employer still withholds at 15%, and you get any difference back when you lodge your tax return.

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 who are foreign residents for tax purposes, which is most WHMs, do not pay the 2% Medicare levy. You claim the foreign resident exemption in your tax return for the days you were a foreign resident.

WHM visa holders are not eligible for Medicare benefits unless they come from a country with a reciprocal health care agreement: the United Kingdom, Ireland, Belgium, Finland, Italy, Malta, the Netherlands, New Zealand, Norway, Slovenia, and Sweden. A WHM who is an Australian resident for tax purposes pays the Medicare levy unless they qualify for an exemption. One exemption needs a Medicare Entitlement Statement from Services Australia showing you were not entitled to Medicare benefits, and either no dependants or all your dependants (including your spouse) in a Medicare levy exemption category. The "Medicare Levy Surcharge" (MLS) also does not apply to WHMs.

For a foreign-resident WHM, 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 $4,020 in income tax plus $900 in Medicare levy (before LITO), totalling $4,920. 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 FY2026-27 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 $40,405 after income tax and Medicare levy (with LITO applied), which is $2,155 more than a WHM at the same salary.

WHM vs Resident vs Non-Resident Tax Comparison

WHMs pay more income tax than residents at every income level. With the resident second-bracket rate now matching the WHM 15% rate, the gap is the 15% applied to the $18,200 tax-free threshold that WHMs do not get: a constant $2,730 once income passes $18,200. Against standard non-residents (30% from the first dollar), WHMs pay less at every income level. 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 FY2026-27, 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, the same as for 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 higher than the 35% rate on the taxed element for other temporary residents (38% applied only while the 2014-17 budget repair levy was in force). On a $5,400 super balance, the DASP payment after tax is $1,890. Leaving the balance unclaimed does not avoid the 65% tax: 6 months after your visa ends the fund transfers it to the ATO, and the same DASP tax applies when you claim it from there.

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. Your DASP is generally paid within 28 days of a complete application being received

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%, with the contribution received by the fund within 7 business days of each payday since Payday Super commenced on 1 July 2026

Penalties for Non-Compliance

Employers who fail to register or who apply incorrect withholding rates can face administrative penalties 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 each pay to the ATO via Single Touch Payroll (STP), including the WHM income type.

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. Answer the residency questions using the ATO residency tests, not your visa type. Most WHMs are foreign residents for tax purposes, and WHM rates apply either way unless you are a resident from an eligible NDA country (see above)
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 FY2026-27?

The WHM 15% flat rate on the first $45,000 is unchanged in FY2026-27, and the superannuation guarantee rate stays at its legislated 12% ceiling. The year's main change is on the resident side: the resident second-bracket rate fell from 16% to 15% on 1 July 2026.

A backpacker earning $45,000 still accumulates $5,400 in super contributions. The SG rate reached its legislated 12% ceiling on 1 July 2025 and no further increases are scheduled. The resident second-bracket cut from 16% to 15% does not change WHM rates, but it narrows the resident comparison: resident income tax on $45,000 fell from $4,288 in FY2025-26 to $4,020 in FY2026-27, while a WHM still pays $6,750. 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 calculators and guides cover income tax, non-resident rates, super and tax returns for working holiday makers.

• 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 FY2026-27 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