Work in Australia: backpacker tax now 19%
27 September 2016 by News DeskWork in Australia on a holiday visa and you could have paid over 32% tax under previous government plans.
Work in Australia while on a backpacker holiday visa and now you will only have to pay 19 per cent tax on the first $37,000 that you earn.
In a bid to attract more temporary workers – many of whom were scared off by plans for the high tax – the government has lowered the visa application fee by $50 to $390.
It has also increased the age that backpackers can come to Australia to 35 years and they will now be able to work for the same employer for 12 months as long as they change location after six months.
The backpacker tax U-turn was announced this week by government Treasurer Scott Morrison after months of protest from farmers and the tourist industry.
Work in Australia: backpacker tax
Backpackers and temporary workers make up around 40% of the labour employed on Aussie farms during harvest seasons and industry leaders feared an exodus of workers that would threaten national productivity.
Tourist chiefs were also up in arms over fears that tens of thousands of backpacker visitors would stay away from Australia every year.
Treasurer Morrison said the changes were designed to encourage backpackers to come to Australia as they were an “important source of labour for the agricultural sector” and that the new tax rate of 19% was “commensurate” with tax regimes in Canada, the UK and New Zealand.
While lowering of the tax on backpackers is welcome, on the downside, the government has introduced a higher charge on all passengers leaving Australia.
The government is to raise the passenger movement charge by $5 to $60 and will take 95% of foreign workers’ superannuation when they leave Australia.
The purpose of the superannuation system was “to fund the retirement of Australians”, not foreign workers, Morrison said.
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