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lknights1987

Australian Backpacker tax for 2016

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Hi guys,

 

I plan to travel Australia next year on a WHV and just read an article on yahoo finance regarding backpacker tax which will be coming into place in 2016. Anyone know more on this? And can backpacker tax be claimed back at the end of a WHV?

 

Here is the link to the article

 

https://uk.finance.yahoo.com/news/australian-backpacker-tax-hit-british-081250323.html

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Hi guys,

 

I plan to travel Australia next year on a WHV and just read an article on yahoo finance regarding backpacker tax which will be coming into place in 2016. Anyone know more on this? And can backpacker tax be claimed back at the end of a WHV?

 

Here is the link to the article

 

https://uk.finance.yahoo.com/news/australian-backpacker-tax-hit-british-081250323.html

 

 

For some reason, backpackers do have that impression they can claim tax back when they leave. But it is not true and never has been. Tax can only be claimed back if it has been over paid during the course of the year.

 

The article is a little misleading at the beginning, when it says that back payers pay tax for the first time. It simply is not the case, somebody who is non resident has always (well in recent memory) paid a fixed % of earnings in tax. And even those backpackers that claimed to be tax resident would be subject to tax, same way as anyone else.

 

The difference from 2016, is that the WHV holder can no longer claim to be tax resident and therefore no tax free allowance / personal allowance and non-resident tax rates will apply.

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The 32.5% tax will seem incredibly high considering in the UK, Basic Rate tax is approximately 20%, and even a 2nd income tax rate is 23%!!

 

I'm planning to be in Aus from June 2016 so will be just before the new legislation comes in. It will be tough, but certainly not impossible.

 

Based on the idea of working on a farm/orchard/vineyard etc... Earning $20ph working 6 hours a day, 5 days a week = $600. Less 32.5% is $400 p/w. Take away the boarding at the hostel/farm (Average $150) it leaves you with $250 a week to eat and play with which in my eyes is plenty (I have been to Aus as recent as November 13 so understand the cost of food and activities etc..)

 

Obviously that scenario is based on finding a steady job that you can work 30 hours a week. Even still, I'd say its possible to live off of 20 hours a week and not eat into savings, but you probably wouldn't be able to add to the savings.

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Obviously I think we should pay tax but I think that rate sounds so high. Between that and the other visa changes there will be less backpackers. Or is what what they are aiming for so more australians get jobs? For some people it makes more sense just to go a holiday. I'm actually considering that option more now

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The rate is ridiculously high for people on the minimum wage but Joe Hockey has to find some way of subsidizing his multi millionaire cronies and where else to find the $ other than taxing young people trying to fund their travels by fruit picking etc?

... o hang on.....

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That's kinda how it feels. Like they are trying to get at backpackers. I know the stereotype is that they live off goon and noodles but it sounds like they spend a lot of money. I read somewhere that they are starting to see New Zealand as a better option. If I had the money I think I'd just go to australia for a few months without working and then move on to NZ

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I agree this is a regressive move taxing backpackers for every dollar at 32.5% but it always was 32.5% they have just removed the $18000+ tax free threshold that backpackers used to get. This also comes after Four Corners did an investigation into slave labour conditions meted out to backpackers. Some farmers don't deserve to get staff. My own son got treated abysmally in Queensland being asked to pay a ridiculous amount for a bunk and getting no work for days due to weather conditions. Whilst weather is not the farmers fault they would not take them back to a town miles away so they could go elsewhere, despite the farmer taking an empty minibus to town to pick up other workers without letting them know.

Remember the vast distances between towns in some areas. The move has nothing to do with getting Aussies to do these jobs very few Aussies would take these jobs.

 

see this link

https://newmatilda.com/2015/05/05/four-corners-exposes-slave-labour-and-sexual-assault-farm-and-factory-workers

Edited by winter1

:confused:

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The rate is ridiculously high for people on the minimum wage but Joe Hockey has to find some way of subsidizing his multi millionaire cronies and where else to find the $ other than taxing young people trying to fund their travels by fruit picking etc?

... o hang on.....

 

It has always been the case that backpackers pay a flat rate (used to be 37% I think) and have no personal allowance. Yes a bit harsh compared to the sliding scales we are used to, but it has always been the way in Australia. It is just that in the past some would claim to be resident, when truly most backpackers would not fit the description, but it is generally not subject to checking. The rule removes ambiguity and what has frankly been a tax dodge for years. I can't imagine it would make much of a dint in treasury coffers though.

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