How to claim your tax back in Australia

HOW TO CLAIM YOUR TAX BACK AUSTRALIA

You may come to Australia to reside permanently, study or holiday.

If you earn money here you will pay tax and may need to lodge an Australian tax return. To work in Australia you need a work visa and should have a tax file number (TFN).

If you earn money from overseas you may need to declare your foreign income in your tax return.

If you work in Australia, your employer has to pay superannuation for you if you are an eligible employee.

1) Working holiday makers

If you work in Australia as a working holiday maker (WHM), your employer will withhold tax from your pay and you may need to lodge a tax return each year.

You are a WHM if you have a visa subclass of either:

  • 417 Working Holiday
  • 462 Work and Holiday (backpackers).

Your residency for tax purposes

For tax purposes in Australia, individuals will be either:

  • an Australian resident
  • a foreign resident.

For most WHMs, whether you are an Australian or a foreign resident for tax purposes does not affect the rate of tax you pay.

The only exception to this is if you are both:

  • an Australian resident for tax purposes
  • from a non-discrimination article (NDA) country.

For more information, see Taxation of Australian resident WHMs from NDA countries.

Most people who come to Australia for a working holiday or to visit are foreign residents for tax purposes.

To work out your residency as a WHM, see Are you an Australian resident for tax purposes if you come for a working holiday or visit?

Australian resident WHM from NDA country

Some WHMs may be eligible to be taxed on the same basis as a resident Australian national.

To be eligible, you must be:

  • considered an Australian resident for tax purposes and
  • from an NDA country.

A resident Australian national is someone who meets both of the following:

  • the person is a resident of Australia for tax purposes
  • the person is a permanent resident of Australia or an Australian citizen.

Australia’s tax treaties with NDA countries contain non-discrimination articles that affect how much tax is payable.

For more information, see Taxation of Australian resident WHMs from NDA countries.

Tax withheld by your employer

If you are a WHM, and your employer is registered with us as a WHM employer, they will withhold tax at a rate of 15% for the first:

  • $37,000 you earn during 2019–20 and earlier income years
  • $45,000 you earn during 2020–21 and later income years.

Higher rates of withholding will apply above these thresholds.

Tax table for working holiday makers

The following tax rates for 2020–21 apply for working holiday makers holding a subclass 417 or 462 visa from 1 July 2020.

Working holiday makers income tax rates for 2020-21
Taxable income Tax rate Value (a)
$0 – $45,000 15% on each $1 up to $45,000

0.15

$45,001 – $120,000 32.5% on each $1 over $45,000 to $120,000

0.325

$120,001 – $180,000 37% on each $1 over $120,000 to $180,000

0.37

$180,001 and over 45% on each $1 over $180,000

0.45

If no TFN is provided you must withhold at 45% on total payments made.

Lodge a tax return

The Australian income year starts on 1 July and ends on 30 June the following year. Most individuals who earn income and had tax withheld during the income year need to lodge an income tax return.

You can apply for your refund for free online at www.ato.gov.au, however it can be extremely confusing! We suggest using a Tax Agent specialising in working holiday makers if you feel need some help.

If you leave Australia permanently before 30 June, you can lodge your tax return early.

2) Studying in Australia

If you’re enrolled to study in Australia in a course that lasts for six months or more, you may be regarded as an Australian resident for tax purposes. This means:

  • you pay tax on your earnings at the same rate as other residents
  • you’re entitled to the benefits of the Australian tax system, such as
    • the tax-free threshold (or part of it, if you’re here for only part of the financial year)
    • tax offsets
    • generally lower tax rates than a foreign resident.

Generally Australian residents must declare all income they’ve earned, both in Australia and internationally, on their Australian tax return. However, as an overseas student you probably have a temporary visa, which means that you may be a temporary resident.

If you’re a temporary resident, most of your foreign income is not taxed in Australia and you don’t declare it on your Australian tax return. You only declare income you derive in Australia, plus any income you earn from employment or services performed overseas while you are a temporary resident of Australia.

Lodge a tax return

The Australian income year starts on 1 July and ends on 30 June the following year. Most individuals who earn income and had tax withheld during the income year need to lodge an income tax return.

You can apply for your refund for free online at www.ato.gov.au, however it can be extremely confusing! We suggest using a Tax Agent specialising in tax return for overseas students if you feel need some help.

If you leave Australia permanently before 30 June, you can lodge your tax return early.

3) Seasonal Worker Program and Pacific Labour Scheme

If you have a Temporary Work (International Relations) subclass 403 visa to work in Australia in the Seasonal Worker Program (SWP) or Pacific Labour Scheme (PLS) your employer will withhold tax from your pay. You may also need to lodge an income tax return in Australia each year.

The SWP and PLS were merged to form the Pacific Australia Labour Mobility (PALM) scheme on 4 April 2022. If you become employed under this scheme, see PALM scheme. The taxation arrangements for workers in the SWP and PLS only continue to apply to you while you remain employed under the SWP or PLS on a visa issued before 4  April 2022.

Your residency for tax purposes

For tax purposes in Australia, individuals will be either:

  • an Australian resident
  • a foreign resident.

Most people who come to Australia under the SWP are foreign residents for tax purposes. This is because workers in the SWP, consistent with their visa requirements, don’t intend to stay in Australia. They only intend to work here for a short time and return home.

Most people who come to Australia under the PLS are Australian residents for tax purposes. This is because they form a connection with Australia and intend to make Australia their home.

Whether you are a resident for tax purposes will depend upon your circumstances.

Tax and withholding in Australia

Before you receive your pay, your employer will withhold tax.

Foreign residents in the SWP

Your employer will withhold tax at the rate of 15% for each dollar you earn as a foreign resident worker under the SWP. You are not required to lodge a tax return if you don’t earn income from any other sources in Australia.

Your SWP income is considered to be non-assessable, non-exempt income and you can’t claim any deductions against this income.

Australian residents in the PLS

You pay tax at the rate set out in the tables for residents of Australia if you are a resident of Australia for tax purposes. Your employer is required to withhold tax when they pay you. You are required to lodge a tax return.

Lodge a tax return

The Australian income year starts on 1 July and ends on 30 June the following year. Most individuals who earn income and had tax withheld during the income year need to lodge an income tax return.

You can apply for your refund for free online at www.ato.gov.au, however it can be extremely confusing! We suggest using a Tax Agent specialising in tax return for seasonal workers if you feel need some help.

You don’t need to lodge a tax return or a non-lodgment advice if you are a foreign resident for tax purposes working in the SWP.

If you leave Australia permanently before 30 June, you can lodge your tax return early.

4) Pacific Australia Labour Mobility (PALM) Scheme

If you have a Temporary Work (International Relations) subclass 403 visa to work in Australia under the Pacific Australia Labour Mobility (PALM) scheme, your employer will withhold tax from your pay. You may also need to lodge an income tax return in Australia each year.

Your residency for tax purposes

For tax purposes in Australia, individuals will be either:

  • an Australian resident
  • a foreign resident.

Most workers who come to Australia under the seasonal PALM scheme are foreign residents for tax purposes.

Workers who come to Australia under the long-term PALM scheme may be considered Australian residents for tax purposes.

Whether you are a resident for tax purposes will depend on your circumstances.

Tax and withholding in Australia

Before you receive your pay, your employer will withhold tax. The amount they withhold depends on your residency status and how much you earn.

Foreign resident workers

Your employer will withhold tax at a flat rate of 15% on all payments made to you if:

  • you are a foreign resident for tax purposes
  • you work under the PALM scheme
  • your employer is an approved employer under the existing Seasonal Worker Program (SWP) deed of agreement.

This tax is forwarded to us and you are not required to lodge a tax return if you don’t earn income from any other sources in Australia.

Your program income is considered to be non-assessable, non-exempt income and you can’t claim any deductions against this income.

If your employer is not an approved employer, they will withhold tax at foreign resident rates and you will need to lodge a tax return.

We are aware of proposed changes to taxation arrangements for the PALM scheme, however, these changes have not been passed by Parliament. This information will be updated as any new tax arrangements for PALM scheme workers become law.

Australian resident workers

Australian resident workers pay tax at the rate set out in the individual income tax rates. Your employer is required to withhold tax when they pay you. You are required to lodge a tax return.

Lodge a tax return

The Australian income year starts on 1 July and ends on 30 June the following year. Most individuals who earn income and had tax withheld during the income year need to lodge an income tax return.

You can apply for your refund for free online at www.ato.gov.au, however it can be extremely confusing! We suggest using a Tax Agent specialising in tax return for seasonal workers if you feel need some help.

If you leave Australia permanently before 30 June, you can lodge your tax return early.

Apply for a departing Australia superannuation payment (DASP)

When you leave Australia and return to your home country, you can apply to have your super paid to you as a departing Australia superannuation payment (DASP).

You can apply after you leave Australia if you meet all DASP requirements.