Commissioner clarifies tax arrangements for working holiday makers

With a number of media reports circulating in relation to the tax treatment for working holiday makers and the tax that they pay, the ATO wants to make clear the tax arrangements in place.
Tax Commissioner Chris Jordan said “the amount of tax that a working holiday maker may pay will depend on their residency status for tax purposes, and we consider the individual circumstances that apply to each working holiday maker.
“The reality is, what we see is that most working holiday makers are transient – they move around and do not establish residency in Australia during their stay.
“Therefore, as a non-resident for tax purposes, they will be taxed only on their Australian-sourced income, such as money they earn working in Australia, and they will commence paying tax on the first dollar of income they earn – at 32.5c in the dollar”.

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