The Government announced that from 1st of January of 2017 holders of Working Holiday (Subclass 417) and Work & Holiday (Subclass 462) will pay 19% tax rate on earnings up to $37,000, rather than the 32.5% per cent announced in the 2015-216. Additionally, the Government will also reduce the application charge by $50 to $390.
These changes are aimed to lower the cost of coming to Australia and to promote the arrivals of working holiday makers, which have been in decline since 2012-13.
The official announcement from the Treasurer, Scott Morrison, said the following:
“The Turnbull Government recognises that working holiday makers are an important part of Australia’s $43.4 billion tourism industry and a key source of labour, particularly in the agriculture, horticulture, tourism and hospitality sectors. We also recognise, as do stakeholders, that working holiday makers should pay fair tax on their earnings.
We will also seek to boost the arrivals of working holiday makers, which have been in decline since 2012-13 as a consequence of factors including exchange rate variations and changed economic conditions in source countries. We will introduce more flexible arrangements to benefit working holiday makers and industry, allowing an employer with premises in different regions to employ a WHM for 12 months, with the WHM working up to six months in each region. In addition, we will task Tourism Australia to promote Australia to potential working holiday makers through a $10 million global youth targeted advertising campaign.
The Turnbull Government’s package of reforms to working holiday maker arrangements will therefore not only ensure working holiday makers pay fair tax on their earnings but also increase Australia’s attractiveness as a top destination for backpackers”
The full announcement is available here.