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Working Holiday Makers - Tax Free No More

Written By Dion Hawkins
Wed, May 27, 2015
Dion Hawkins

The Australian Government has announced that foreign nationals visiting Australia on a working holiday will no longer receive the income tax free threshold enjoyed by ‘residents for tax purposes’. Working holiday visitors (WHVs) are currently not taxed until they earn in excess of $18,200. From 1 July 2016, WHVs will be immediately subject to the middle income tax rate of 32.5% for every dollar earned. Removing the tax break to WHVs was a recent budgetary measure intended to raise $540 million over 4 years.

It is however, uncertain whether funds raised from WHV tax increase will achieve the projected revenue. The increase may make Australia a less attractive option for WHVs who often rely on their ability to earn a sufficient income to support the holiday component of the visa. WHVs also act as a filter feeder into other migration pathways to Australia through education and temporary or permanent skilled migration, which in turn brings significant economic benefit.

If you are considering sponsorship and wish to take advantage of the current VACs before they increase please contact a TSS migration agent for a confidential discussion of your options on 03 9421 1020.

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