Skip to main content
457 Visa and SponsorshipCommunity NewsVisa and Immigration

The Working Holiday Visa “Super” Rip Off: The true cost of working in Australia on a 417 or 462 Visa

By 1 December 2016No Comments

Under new tax rates and superannuation rules anyone earning 20k on a 417 or 462 working holiday visa will be $4,900 worse of in their total net income than anyone else working for the same money here in Australia. Further, the everyday Australian will feel the sting of these new rates and rules, as prices go up.

417 and 462 workers don’t earn much in the first place so why should they be worse off than other workers in the same position. More importantly, why would they still want to come to Australia on a Working Holiday visa?


shutterstock_164215946417 and 462 visa holders will, at a minimum, be approximately $3000 worse off in their net pay than others in a similar position. Further, the superannuation levy of 9.5%, which their employer has to pay, is a further $1900 cost to the employer, and only 5% of that money will go back to the 417 and 462 visa holders when they leave Australia.

The individual is losing 95% of the available super balance, which goes straight to the government, on top of the $3000. This means that on a salary of $20K they are missing out on $4900 which another person who was working under a 457 visa, or was a permanent resident or citizen, would be entitled to.

How can one person be taxed and penalised in regards to super, despite the fact that they are doing the exact same job as the person next to them? I’m not sure how this works under employment law, but it certainly seems interesting.

In fact, the 9.5% that the employer is paying for the super component of the employee’s income, is in effect, more like a tax as opposed to a super contribution. The employee is unable to enjoy the complete value of it and the government will soak up the 95% excess when the individual leaves the country. On a 20K salary that’s a tax (sorry I mean super) amount of $1800 lost by both the employer and employee and will go straight to the government.

This is assuming that an employee is earning 20K a year, if you consider the same scenario with an annual salary of 50K, then the employer is effectively paying an extra $4512.50 to the government in the disguise of super. Perhaps employers should make no super contributions at all for working holiday visa holders, as no one benefits but the government.

As individuals, we need to realise that this will have a knock on effect to us, particularly on our cost of living, as it will affect the industries where 417 and 462 visa holders are working.
If fewer 417 and 462 workers are coming over to Australia, dissuaded by the higher tax to them, the cost of picking fruit, farming or working in the tourist industry will increase and in turn this will impact the cost of food in the supermarkets, holidays for us, a meal at a restaurant, we will have to pay higher prices for the same things.

Why don’t we leave them alone and allow them to do their work, which adds value to our economy, as all the money they earn here goes straight back into our economy as cash flow, unlike some other visa classes which I will mention later. For the year ending 2016, working holiday visa holders spent around 3.3 billion Australian dollars.

Now this madness has been implemented if you have the skills and job opportunities available to you, perhaps as a 417 and 462 visa holder you should consider working under the 457 visa, as this will mean that you won’t have to pay the extra tax, and you will get more out of your super amount should you leave the country. Further, if you decide to stay and become Permanent Residents you will be able to access the whole value of your super.

Looking at a monetary comparison of two different people working in the same position on a $55K salary, but under different visas, it’s evident that those working under the working holiday visas are in a worse off position. The tax payable is higher for those on the working holiday visa, resulting in a difference of $3000 to the yearly amount of take home pay. This is before you add in the difference in super. Both persons would pay super contributions of $5225, but whilst those who are Australian citizens, permanent residents and 457 visa holders are able to access the total amount of that super, 417 and 462 visa holders are only able to access $261.25, which is the 5%, with the remaining $4936.75 going straight to the government. This means that a person working for a 55K salary under a 417 and 462 visa is looking at an annual loss $7963.75 in comparison to what others in a similar position are earning. These figures are all based on the 15% tax rate.

Australia spends tens of millions of dollars on advertising per year to entice people here on a Working Holiday. This is done through the Tourism Industry Budget, and they have even run global competitions in the past. Why should we advertise and then penalise them from coming. Perhaps we should stop the advertising if they are not going to be welcomed, taxed, and treated the same as another person who is working in the same position.

I think there are other visas which should be the focus rather than those on the 417 and 462 visa. For instance, look at the 400 visa, which allows highly skilled people into Australia who earn serious money, but are able to be paid offshore, meaning that no tax is collected at all for the government… go figure!

Purnima Kabra