A Departing Australia Superannuation Payment to a 417 or 462 visa holder is taxed at 65% of the taxable component, withheld before the money reaches you. The rate is fixed by law. What is worth deciding is when you claim, and whether you have found every fund first.
What exactly is the 65% applied to?
The taxable component of the balance, which for a working holiday maker is effectively all of it. Super splits into a taxable component, being employer contributions and the earnings on them, and a tax free component of personal contributions made from money already taxed.
Almost no backpacker has a tax free component, because almost nobody makes voluntary contributions during a working holiday. Where one exists it is paid out without withholding. In practice the whole balance is taxed at 65%, leaving 35% of what the fund holds. On a balance of $10,000 that is a payment of about $3,500.
Why is the rate higher for working holiday makers?
It was raised specifically for this visa class in 2017. The DASP rate for temporary residents generally was 35%, and from 1 January 2017 a separate 65% rate was introduced for holders of subclass 417 and 462 visas, in the same package of changes that set the 15% income tax rate on working holiday maker wages.
The stated logic was that the 15% wage rate is concessional relative to what a foreign resident would otherwise pay, and the higher super rate offsets it. It applies to the visa rather than to the person, so the rate depends on which visa you held when the contributions were made.
- Subclass 417 and 462: 65% on the taxable component
- Other temporary visas, such as a student visa: generally 35%
- A mixed visa history: the fund assesses the components separately
Can the 65% be reduced or claimed back?
No. It is a final withholding rather than a prepayment, so it does not appear on your Australian tax return and there is nothing to offset it against. Tax treaties do not reach it either, and no residency position changes it.
Three things get confused with reduction. If part of your super was earned under a different temporary visa, that portion may be assessed at 35%, which the fund works out from your visa history rather than from anything you claim. The DASP is not included in your Australian taxable income, so it is not taxed twice here. And whether your home country taxes the payment is a question of local law, with many treating it as foreign pension income. Ask at home rather than assume.
Is it still worth claiming a small balance?
Yes, because the alternative is not keeping the money. Six months after the visa ceases, super left behind by someone who has left Australia is transferred to the ATO as unclaimed super, where it stops earning, stops being eroded by fund fees, and stops being anywhere you will trip over it.
The DASP pays 35% of whatever the fund holds, so a $1,500 balance returns about $525 and a $4,000 balance about $1,400. Every one of those is money an employer paid on top of your wages, and none of it comes home by itself.
When should you actually lodge the claim?
After your visa has ceased or been cancelled and after you have left Australia, which are both conditions of eligibility rather than preferences. Approval typically takes around 28 days once lodged, and the payment follows.
The timing question that actually matters is the last quarter. Super is paid quarterly, so if you stop work in May and fly out in June, your employer's contribution for April to June is not due until 28 July. Claiming before that date means claiming against a balance your employer has not finished paying into, and the leftover then has to be chased separately. Against that, every month the balance sits in the fund is another month of administration fees on money you are no longer adding to. The answer depends on what the outstanding quarter is worth relative to the fees.