What tax is taken from your super when you withdraw it as a backpacker?

What is the taxable component of your super?

Super payments are made up of two components:

• Taxable component: includes employer contributions and earnings on those contributions
• Tax-free component: includes any after-tax personal contributions (rare for working holiday makers)

For working holiday makers, the vast majority of the super balance is the taxable component, because all super is employer-paid. The tax-free component, if any, is paid out without withholding.

What does the 65% rate mean in practice?

The 65% tax applies to the taxable component before payment:

• Super balance $2,000 (all taxable): you receive $700 after tax
• Super balance $5,000 (all taxable): you receive $1,750 after tax
• Super balance $10,000 (all taxable): you receive $3,500 after tax

The withholding is substantial, but the remaining 35% is still money that was paid on top of your wages by your employer. Without claiming, you receive nothing.

Why is the rate higher for working holiday makers?

The 65% DASP rate was introduced in January 2017 as part of the broader "backpacker tax" reforms:

• Before 2017: 35% DASP rate
• From 1 January 2017: 65% for working holiday visa holders (subclass 417 and 462)
• Other temporary visa holders: still pay 35%

The government's reasoning was that the existing 15% working holiday maker income tax rate is already concessional, so a higher rate on the super withdrawal balances out the overall tax treatment.

Is there any way to reduce the DASP tax?

For working holiday makers, the 65% rate is fixed:

• It is applied by the fund or ATO before payment
• There is no general mechanism to claim it back through a tax return
• Tax treaty exemptions do not apply to DASP

The practical step is to make sure no super is left behind. Even at 65%, claiming a small balance is better than abandoning it. Get in touch with our team and we identify all funds holding super for you, so the DASP claim captures every dollar.