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New tax rate for Working Holiday Makers

Following extensive advocacy from R&CA, working holiday makers (WHM) will now be taxed at 15 per cent from the first dollar earned instead of the 32.5 per cent originally proposed by the Australian Government. After extensive negotiation with the major parties and the Senate, the following has been passed:

  • A 15 per cent tax rate on earnings for working holiday makers up to $37,000, with ordinary tax rates for income exceeding this amount. The rate will apply from 1 January 2017.
  • The tax rate on superannuation of working holiday makers will be reduced from the 95 per cent originally proposed to 65 per cent. This rate will apply from 1 July 2017.
  • The Passenger Movement Charge will increase by $5 to $60 effective 1 July 2017, with a commitment not to increase the PMC for another 5 years.
  • A $10 million young campaign will be developed to promote Australia to prospective working holiday makers.

R&CA has welcomed the end of the uncertainty, but has highlighted the need to reinforce positive messaging about Australia as a great place to work and travel here.


In order to be able to apply to 15 per cent tax rate, businesses must register with the Australian Tax Office here.

Further information on the change can be found here.


Please note: The ATO expects to have updated tax tables for working holiday makers available on their website by the beginning of next week.


  • Perons Health Cafe Says:
    December 15, 2016 08:56:53

    The super provisions for WHM is simply another tax on small business. There should. be no super for WHM, they are on a working holiday not working for retirement, they are not residents. This is evidenced by the current 95% tax on their super! Another tax grab on small business.

    • R&CA Admin Says:
      December 15, 2016 09:37:48

      Thanks for your comment. We realise superannuation payments for working holiday makers can represent a significant administrative and cost burden to many small businesses. That’s why we argued for changes to the tax treatment of working holiday makers in our federal budget submission, submission to the board of taxation review, as well as our comments to the Senate Inquiry on the working holiday maker reform package. We will continue to engage with the government on this issue for you.