au-working-holiday-makers

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# AU Working Holiday Makers

## Australia Working Holiday Makers v1.0

> **General reference only.** This skill is general tax and accounting reference material for
> AI-assisted workflows. It has not been reviewed for any specific person's facts, documents,
> elections, deadlines, residency, filing status or local procedures. Do not rely on it to
> lodge, pay, amend or take a tax position without review by a qualified professional.

## Section 1 - Quick Reference

**Quick reference table**

| Field | Value |
| --- | --- |
| Country | Australia |
| Income year covered | 2026-27 (1 July 2026 to 30 June 2027) |
| Who is a WHM | A holder of a subclass 417 Working Holiday or 462 Work and Holiday visa, or an associated bridging visa while a further 417 or 462 application is decided |
| Registered employer withholding | 15% on the first $45,000 paid to the worker in the income year, then 30% to $135,000, 37% to $190,000 and 45% above |
| Unregistered employer withholding | Foreign resident rates: 30% from the first dollar to $135,000 |
| No TFN | 45% of every payment, ignoring cents |
| Tax on assessment | 15% to $45,000; $6,750 plus 30% to $135,000; $33,750 plus 37% to $190,000; $54,100 plus 45% above |
| Tax-free threshold, offsets, Medicare levy adjustments | None for WHM withholding |
| Superannuation guarantee | 12% of ordinary time earnings, with choice of fund |
| Departing Australia superannuation payment | Taxed at 65% for a WHM, claimed after leaving Australia, not included in a tax return |
| Lodgment | No return needed where the only income is WHM salary or wages under $45,001 |
| STP reporting | Income type WHM with the country of nationality; tax treatment code H with R, U or F |
| Tax authority | Australian Taxation Office |
| Reviewed by | Pending. Australian CPA or CA review required |

## Section 2 - The employer workflow

**Step 1. Register before the first payment.**
An employer of a 417 or 462 visa holder must be registered for PAYG withholding and then register
as an employer of working holiday makers. Penalties apply for failing to register. See Section 4.

**Step 2. Check the visa.**
Confirm work rights and the visa subclass through Visa Entitlement Verification Online (VEVO).

**Step 3. Take a TFN declaration.**
The worker declares that they are a working holiday maker. Withhold at WHM rates even if they do
not, provided the visa is a 417 or 462.

**Step 4. Withhold under Schedule 15.**
Track total payments to each worker for the income year and move up the rate scale as the
cumulative total passes each threshold. See Section 3.

**Step 5. Pay superannuation.**
Superannuation guarantee applies as for any employee. See Section 6.

**Step 6. Report through STP.**
Income type WHM with the worker's country of nationality, or payment type code H on a payment
summary. See Section 5.

**Step 7. Handle changes.**
A worker who moves to another visa stops being a WHM from that date; withhold under the ordinary
tables and report a second income type from then.

## Section 3 - Withholding and tax rates for 2026-27

**Working holiday maker income tax rates and Schedule 15 coefficients**

| Taxable income | Tax on this income | Withholding coefficient (a) |
| --- | --- | --- |
| $0 to $45,000 | 15 cents for each $1 | 0.15 |
| $45,001 to $135,000 | $6,750 plus 30 cents for each $1 over $45,000 | 0.30 |
| $135,001 to $190,000 | $33,750 plus 37 cents for each $1 over $135,000 | 0.37 |
| $190,001 and over | $54,100 plus 45 cents for each $1 over $190,000 | 0.45 |

- **Registered employers** — Withhold a flat 15% from the first dollar up to $45,000 of total payments to the worker in the income year, then apply the next coefficient to whole pays once the cumulative total has passed each threshold. In the ATO's example a worker whose payments passed $45,000 in April is withheld at 30% on the whole of May's pay. The formula is withholding equals the coefficient multiplied by the pay ignoring cents, rounded to the nearest dollar.  _([ATO, Schedule 15](https://www.ato.gov.au/tax-rates-and-codes/schedule-15-tax-table-for-working-holiday-makers))_
- **All payments** — Schedule 15 covers every payment to a WHM: salary and wages, allowances, the taxable component of an employment termination payment, unused leave, return to work payments, back payments, commissions, bonuses and payments to actors and entertainers. Do not use Schedule 7 or Schedule 11 for a WHM.  _([ATO, Schedule 15](https://www.ato.gov.au/tax-rates-and-codes/schedule-15-tax-table-for-working-holiday-makers))_
- **Unregistered employers** — An employer that has not registered must withhold at foreign resident rates, which start at 30% from the first dollar up to $135,000, and may be penalised for not registering.  _([ATO, Employer registration for working holiday makers](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/registration-obligations-for-businesses/work-out-which-registrations-you-need/taxation-registrations/employer-registration-for-working-holiday-makers))_
- **No TFN** — Withhold 45% of every payment, ignoring cents, where the worker has not quoted a TFN, claimed an exemption or advised that they have applied for one; a worker who has applied has 28 days to provide it.  _([ATO, Schedule 15](https://www.ato.gov.au/tax-rates-and-codes/schedule-15-tax-table-for-working-holiday-makers))_
- **No adjustments** — A WHM cannot claim the tax-free threshold, tax offsets or Medicare levy adjustments through withholding, cannot have a study and training support loan debt and cannot receive lump sum B payments. Ignore any offset or Medicare claim on the declaration.  _([ATO, Schedule 15](https://www.ato.gov.au/tax-rates-and-codes/schedule-15-tax-table-for-working-holiday-makers))_
- **Variations** — Only a PAYG withholding variation notice from the ATO changes the rate, for example for a resident WHM from a non-discrimination article country. See Section 7.  _([ATO, Employers of working holiday makers](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/hiring-a-new-worker/employers-of-working-holiday-makers))_
- **Income tax rates** — The 2025-26 and 2026-27 scales are identical. Earlier years used $37,000 and $120,000 thresholds and a 32.5% second rate, so a prior-year return must use the table for that year.  _([ATO, Tax rates: working holiday maker](https://www.ato.gov.au/tax-rates-and-codes/tax-rates-working-holiday-makers))_

## Section 4 - Employer registration

- **Who must register** — Any employer who employs, or plans to employ, a 417 or 462 visa holder, before making the first payment. The business must already be registered for PAYG withholding.  _([ATO, Employer registration for working holiday makers](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/registration-obligations-for-businesses/work-out-which-registrations-you-need/taxation-registrations/employer-registration-for-working-holiday-makers))_
- **How** — Online through the ATO's Working Holiday Maker Employer Registration Form, through a registered tax or BAS agent, or by phone as an authorised business contact. A PAYG withholding branch can be registered with the branch application form.  _([ATO, Employer registration for working holiday makers](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/registration-obligations-for-businesses/work-out-which-registrations-you-need/taxation-registrations/employer-registration-for-working-holiday-makers))_
- **Check and cancel** — The registration shows on the Australian Business Register, and can be cancelled by phoning the ATO business line on 13 28 66.  _([ATO, Employer registration for working holiday makers](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/registration-obligations-for-businesses/work-out-which-registrations-you-need/taxation-registrations/employer-registration-for-working-holiday-makers))_
- **Contractors** — A WHM who is an employee on the facts must be taxed under Schedule 15 even if they quote an ABN; treating an employee as a contractor attracts penalties.  _([ATO, Employers of working holiday makers](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/hiring-a-new-worker/employers-of-working-holiday-makers))_

## Section 5 - Reporting

- **STP Phase 2** — Report the income type WHM and the worker's home country, which is the country of nationality on the visa. The tax treatment code starts with H, followed by R for a registered employer, U for an unregistered employer or F where no TFN declaration was provided, with no study loan or Medicare levy variation characters.  _([ATO, How to report employment and tax information through STP Phase 2](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/how-to-report-employment-and-tax-information-through-stp-phase-2))_
- **Payment summaries** — An employer not reporting through STP gives every WHM a payment summary showing all payments in the gross section with H in the gross payment type box, and two payment summaries where the worker changed visa during the year.  _([ATO, Employers of working holiday makers](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/hiring-a-new-worker/employers-of-working-holiday-makers))_
- **Income statement** — The worker sees year-to-date income, tax withheld and super in ATO online services through myGov, and uses it to decide whether to lodge.  _([ATO, Working holiday makers](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/working-holiday-makers))_

## Section 6 - Superannuation and the departing Australia superannuation payment

- **Super guarantee** — A WHM is entitled to super like any other employee, at 12% of ordinary time earnings, and must be offered a choice of fund.  _([ATO, Super guarantee](https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/super-guarantee))_
- **DASP eligibility** — After leaving Australia a former temporary resident can claim their super as a departing Australia superannuation payment once the visa has ceased and no other active visa is held, unless they are an Australian or New Zealand citizen or a permanent resident. Applications are made online free of charge and can be started before departure; a paper application to a fund may attract a fee and, above $5,000, a certification of immigration status from Home Affairs.  _([ATO, Departing Australia superannuation payment (DASP)](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp))_
- **DASP tax** — A final withholding applies when the payment is made: nil on the tax-free component and 65% on the taxable component where the fund holds contributions made while the person held a 417 or 462 visa or an associated bridging visa. The 65% rate then applies to the whole payment, including super earned on another visa. The ordinary rates are 35% on a taxed element and 45% on an untaxed element.  _([ATO, Departing Australia superannuation payment (DASP)](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp))_
- **Not assessable** — A DASP is not included in a tax return. The fund or the ATO issues a DASP payment summary within 14 days, with an H indicator where the WHM rate applied, and pays within about 28 days of a complete application.  _([ATO, Departing Australia superannuation payment (DASP)](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp))_
- **Unclaimed super** — Six months after the person leaves with a ceased visa, the fund transfers the balance to the ATO as unclaimed super, which can still be claimed as a DASP.  _([ATO, Departing Australia superannuation payment (DASP)](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp))_

## Section 7 - Residency and the non-discrimination article countries

- **Most WHMs are foreign residents** — The Commissioner's long-standing view is that a person who comes to Australia for a holiday and works to fund it is a visitor, not a resident, whatever the length of stay. Residency can start when the purpose changes, for example on committing to employer sponsorship or applying for a permanent visa.  _([ATO, Australian residency if you're on a working holiday or visit](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/australian-residency-if-you-re-on-a-working-holiday-or-visit))_
- **Factors** — Purpose of the stay, living arrangements, community ties, location of assets and family ties in Australia are weighed together, against arrangements to return home, study or employment to go back to and continuing connections abroad.  _([TR 2023/1 Income tax: residency tests for individuals](https://www.ato.gov.au/law/view/document?DocID=TXR/TR20231/NAT/ATO/00001))_
- **The Addy decision** — A WHM who is both an Australian resident for tax purposes and a national of an eligible non-discrimination article country is taxed on the lower of the WHM basis and the basis that applies to a resident Australian national. The eligible countries are Chile, Finland, Germany, Israel (from 2020-21), Japan, Norway, Turkey and the United Kingdom; Iceland's treaty excludes WHM rates from its article.  _([ATO, Taxation of Australian resident WHMs from NDA countries](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/taxation-of-australian-resident-whms-from-nda-countries))_
- **What changes for an eligible resident** — Employers keep withholding at 15%. The worker lodges a return as a resident, including foreign-sourced income where Australia has taxing rights, and receives the resident rates, the low income tax offset and a Medicare levy liability if that produces less tax. A PAYG variation is available only after a prior year assessment as a resident or a private ruling.  _([ATO, Taxation of Australian resident WHMs from NDA countries](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/taxation-of-australian-resident-whms-from-nda-countries))_
- **Employers are unaffected** — The decision changes nothing for employers unless the ATO issues a variation notice.  _([ATO, Employers of working holiday makers](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/hiring-a-new-worker/employers-of-working-holiday-makers))_

## Section 8 - The worker's tax return

- **When no return is needed** — A WHM whose only income was salary or wages earned as a WHM, totalling less than $45,001, does not need to lodge a return or a non-lodgment advice.  _([ATO, Working holiday makers](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/working-holiday-makers))_
- **When to lodge** — Lodge to claim deductions, where income passed $45,000 and withholding fell short, where an unregistered employer withheld 30%, or as an eligible NDA-country resident. The return asks for WHM net income and nationality in the adjustments section.  _([ATO, Taxation of Australian resident WHMs from NDA countries](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/taxation-of-australian-resident-whms-from-nda-countries))_
- **Medicare levy** — A foreign resident for the full year claims a full exemption from the Medicare levy, exemption category 2, and a part-year foreign resident claims it for that period if there are no dependants outside an exemption category.  _([ATO, Foreign residents Medicare levy exemption](https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy/medicare-levy-exemption/foreign-residents-medicare-levy-exemption))_
- **Leaving early** — A worker leaving Australia permanently before 30 June can lodge the return early.  _([ATO, Working holiday makers](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/working-holiday-makers))_
- **TFN** — Apply online once the visa is granted; without a TFN the 45% rate applies to every payment.  _([ATO, Working holiday makers](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/working-holiday-makers))_

## Section 9 - Worked example

**Worked example facts**

| Item | Detail |

From openaccountants/openaccountants, AGPL-3.0.

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