Tax Return:: Australian Resident WHMs from NDA Countries

Hello, this is your tax accountant, P&C Tax Professionals.

Did you know that working holiday makers (WHMs) may also be taxed at the same rate as Australian residents? Unfortunately, this does not apply to every working holiday maker and today we will address the criteria which will allow WHMs to be taxed at the resident tax rates.

<Eligibility Criteria>

As a WHM, you may indeed be taxed at the same tax rate as a resident Australian national if you meet all of the following requirements:

> you are a Working Holiday (subclass 417) or Work and Holiday (subclass 462) visa holder

> you were an Australian resident for tax purposes for either the entire or part of the income year

> you come from one of the following non-discrimination article (NDA) countries:

· Chile

· Finland

· Germany (for 2017-18 and later financial years)

· Israel (for 2020-21 and later financial years)

· Japan

· Norway

· Turkey

· United Kingdom.

When we refer to a resident Australian national, it is described as an individual who is:

> an Australian resident for tax purposes AND

> a permanent resident of Australia or an Australian citizen who is subject to the resident tax rates

<A resident WHM from a non-NDA country OR a non-resident WHM from an NDA country>

If you are a resident WHM from a non-NDA country or a non-resident WHM from an NDA country, you will not be entitled to the resident tax rates. This means that:

> tax rates will continue to apply at the 15% rate (for those of you who have a taxable income ranging from $0 - $45,000) or the respective WHM tax rate for any taxable income above that range

> your employer will keep withholding tax at the 15% rate

<WHM from an NDA country AND an Australian resident for tax purposes>

If you are a WHM from an NDA country plus you are an Australian resident for tax purposes, the following information will apply to you:

> your employer will continue to withhold tax from your pay at the 15% rate

> you will be taxed at the resident tax rate and as a result will pay a lower amount of tax in contrast to WHMs who are either non-residents or from a non-NDA country

For the WHM and resident tax rates, please refer to our previous blog post on individual income tax rates for the 2023 FY.

Link to the blog post on “2023FY individual income tax rates”: https://en.pnctax.com.au/single-post/tax-return-2023fy-individual-income-tax-rates

Today, we have looked at the criteria for WHMs who are taxed at the same rate as resident Australian nationals and we also briefly touched base on the tax treatment for WHMs who are from an NDA country. If you have any other concerns or questions in regard to your tax return, please feel free to contact us on our official Facebook Page (P&C Tax Professionals – Australia) or send a message to our email address pnctax@naver.com.

Thank you and bye for now!