There is a proposal making it’s way through government at the moment which states that “as of the 1 July 2016, the 417 and 462 working holiday visa holders will NOT receive the tax free threshold of $18k”, meaning they will be taxed from the first dollar they earn. They will have their tax status changed from one of resident, to one of non-resident e.g. the first $18,200 tax free threshold will be removed and they will be taxed from $0 (the first dollar earnt).
This means they will pay more tax than Australian residents or international people on 457 visas working in the same job as them.
This might be a good time for both individuals and companies employing people on working holiday visas to look at their individual ability to move to the 457 visa before the end of June 2016 so that they can be taxed the same as an Australian resident going forward.
Apart from the obvious issues this will cause the rural and hospitality industries, who are quite rightly arguing this at the moment, it will also affect several other organisations who employ working holiday visa holders in permanent roles. If this is not changed before the end of June 2016, then as of 1 July 2016, these individuals will be taxed higher than the person sitting next to them who is either an Australian resident or on a 457 work visa. This would most probably lead to them asking for an increase in wages to counteract the net income loss they will incur.
Some people on a 417 or 462 working holiday visa will be eligible to move across to the 457 work visa and both them and their employers should look at this urgently so it does not cause the discussion around increase in pay rates which will be inevitable and the possibility of losing the person all together.
To see if they/you qualify for a 457 visa download the
For further information on this proposed change, visit: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201516/Holiday