The Federal Government has shown it could be prepared to rethink an increase to new “backpacker tax“. Assistant Agriculture Minister Anne Ruston stated that she recognises concerns about looming labour shortages amid a downturn in working holiday makers to Australia.
There is a survey below and results will be going directly Senator Anne Ruston’s office. Please share your opinions on the proposed “backpacker tax”, good, bad or neutral.
Every dollar you earn will be taxed at 32.5%. Therefore the hourly rate you are quoted by employer divide that by 3, roughly a third goes to the Australian Government and you keep two thirds. Right now you keep 100% of what you earn up to $18,200.
We’ve included some basic information below regarding the backpacker tax which you can read before completing the survey.
Current Backpacker Tax Situation
Working Holiday Makers currently receive the tax free threshold. This means the first $18,200 you earn is not subjected to tax, if you earn less than $18,200 in a financial year every dollar you pay in tax will be refunded come tax time. The average tax refund is currently $2,600.
New Proposed Legislation
Working holiday makers will pay 32.5% tax on every dollar earn’t, regardless if you earn $100 for the year or $10,000.
What this means
If you earn $10,000 and are taxed $2,000 during your working holiday the following will apply,
Current system: Receive a $2,000 tax refund
Proposed system: Owe $3,250 tax to the Australia Government ( Pay an additional $1,250 in tax above your $2,000 already paid throughout the year)