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Tax Return Requirements: Tax Residency & Employer’s Status

Posted on 06 June 2019

Tax season is here! Are you ready to do your returns? Do you know how much to file for? Dealing with the process, the terminology—it can all be overwhelming!

So we’ve mapped out the info you’ll need for filing your returns. We started with what PAYG is and why you need it. For this post, let’s take on two things: your status for tax purposes and the benefit of having an employer who’s registered to hire backpackers like you.

Identifying Your Status for Tax Purposes

Essentially, the Australian Taxation Office (ATO) identifies backpackers and working holiday makers like you as foreign residents for tax purposes. This is regardless of your visa subclass—whether you have a Working Holiday visa (subclass 417) or visiting Australia for Work and Holiday (subclass 462).Check out a previous post we wrote for more information.

Why is your residency status relevant? As a foreign resident for tax purposes, you will be taxed based on working holidaymaker tax rates: 15 cents on every dollar will be deducted for income up to $37,000. For an income within the range of $37,000 to $87,000, 32.5% income tax will be deducted per $1 (check out this post).

Do you know if your employer is registered to hire you?

Another important factor to know is whether your employer is registered with ATO to hire working holiday makers.

Why is it so important—what’s the benefit in it?Having a registered employer makes all the difference in your income tax deductions! Registered employers are obliged to deduct an income tax rate of only 15% from their working holiday maker employees (for income of up to $37,000). Otherwise, your employer would be obliged to deduct income tax from your pay using foreign resident tax rates, which starts at 32.5%. If this is the case, let us know — we may be able to help you with advice concerning it.

Going through the process of lodging your tax returns and claims can be daunting and getting professional help and advice may be able to help you with that. If you have tax questions or would like more advice about filing your returns, click on this link — we’ll be here to help.


Claim Your Tax Back Now!

Knowing your residency status for tax purposes is key; finding out if your employer is registered to hire backpackers is important, too.

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