It’s official: the new Australian backpacker tax rate will be a flat rate of 15%. On top of that, backpackers will be able to keep 35% of the superannuation employers pay on top of wages. The new rate will take effect from 1st January 2017.
This comes as a relief for farmers, concerned that the indecision of the past 12 months would put off backpackers coming to Australia. The 200,000 backpackers who come to Australia each year are an important source of seasonal fruit pickers.
The take home pay backpackers can expect will actually be more than what they would get in Canada, New Zealand and the UK, according to Department of Agriculture figures. That’s because Australia has a higher minimum wage than Canada, New Zealand and the UK at A$17 an hour. Even when you factor in Canada and the UK’s tax free threshold and New Zealand’s lower backpacker tax rate, backpackers coming to Australia are still better off, calculations show.
The backpacker tax will apply to travelers coming to Australia on a Working Holiday visa subclass 417 and the Work and Holiday subclass 462 visa.
417 visa holders can extend their stay in Australia if they work 3 months in regional Australia in specified sectors, including fruit picking, mining and construction.
As from November 2016, 462 visa holders can also extend their stay in Australia. 462 visa holders are eligible for a second Work and Holiday visa if they undertake three month’s work in northern Australia in tourism and hospitality or agriculture, forestry and fishing.