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Working holiday makers on 417 and 462 visas pay a flat 15% tax on the first 45,000 dollars earned in Australia in 2025-26, with no tax-free threshold. Above that, ordinary rates apply.
The working holiday maker tax rates for 2025-26
- First 45,000 dollars: 15%
- 45,001 to 135,000 dollars: 30%
- 135,001 to 190,000 dollars: 37%
- Over 190,000 dollars: 45%
Two things surprise most backpackers. First, there is no tax-free threshold - Australians pay nothing on their first 18,200 dollars, but working holiday makers pay 15% from the first dollar. Second, the 15% rate only applies automatically when your employer is registered with the ATO as a working holiday maker employer.
Registered vs unregistered employers
Registered employers withhold 15% from the first dollar. Unregistered employers are required to withhold at foreign resident rates, which start above 30%. You cannot always tell in advance - farms and small hospitality businesses are the usual culprits. The good news: over-withholding is not lost money. It is refunded when you lodge your tax return.
Your TFN drives everything
Without a Tax File Number on file, your employer must withhold 45% regardless of registration. Apply for your TFN as soon as you arrive (you must be in Australia to apply), give it to every employer via the Tax File Number Declaration form, and the correct rate applies from the next pay.
The Medicare levy exemption most backpackers miss
Australians pay a 2% Medicare levy on top of income tax. Most 417 and 462 holders are not entitled to Medicare and can claim a full exemption - worth about 500 dollars on 25,000 dollars of income - by obtaining a Medicare Entitlement Statement and claiming it in the tax return. Details in our Medicare levy exemption guide.
Superannuation: the other 12%
On top of wages, every employer must pay 12% of your ordinary earnings into a super fund. You cannot touch it while in Australia, but once you leave and your visa ends you claim it as a DASP (taxed at 65%). A year of full-time work typically leaves several thousand dollars in super - see the best way to claim it.
Residency: the question that decides your return
Most working holiday makers are non-residents for tax purposes, but the working holiday rates above apply regardless. The residency questions in myTax trip up thousands of backpackers every year - answering them wrong is the most common reason for incorrect assessments and ATO amendments. If your situation is not textbook (long stays, one location, studying), get advice before lodging.
Key dates
- 1 July - 30 June: the Australian financial year
- From 1 July: lodge your return
- 31 October: self-lodgment deadline (agents get extensions)
- Leaving permanently mid-year? You may lodge an early return instead of waiting
417 vs 462: same tax, different everything else
Tax treats the subclasses identically - same 15% rate, same DASP tax, same Medicare position. The differences live in visa mechanics and ripple into your working year: 417 (UK, Ireland, most of Europe, Japan, Korea, Taiwan among others) extends via specified regional work; 462 (US, China, Israel, Latin America, others) carries education requirements, country caps, and its own specified-work rules including northern Australia options. Why it matters at tax time: extension-chasing shapes where you work (regional postcodes, agricultural employers - exactly where unregistered-employer withholding and ABN farm arrangements concentrate). Know which subclass you hold, and the tax traps of its typical work map follow predictably.
Frequently asked questions
Do working holiday makers get the tax-free threshold?
No. The 18,200 dollar tax-free threshold does not apply to working holiday maker income - tax starts at 15% from the first dollar.
What tax rate applies to my second year on a 417 visa?
The same working holiday maker rates. Your TFN also stays the same - see what to update for a second visa.
Can I get all my tax back when leaving Australia?
Generally no - 15% on earnings up to 45,000 dollars is the correct final tax. What you recover is over-withholding, the Medicare levy exemption, deductions, and your superannuation via DASP.
Use our refund calculator for a quick estimate, or get in touch with our team - registered tax agents who work only with working holiday makers.