Get Your Australian Working Holiday Visa Before These Tax Changes | For thousands of years, a young person’s rite of passage included venturing away from the safety and security of family life to discover the world around them.
By Simon Vaughan
Australia’s Aboriginal people called this “Walkabout’ and it involved adolescent males living alone in the wilderness for months at a time. Although ‘Walkabout’ was an Aboriginal practice, many of Australia’s young people still venture out on journeys of discovery even today, although now instead of heading further into the Outback, they head off around the world on Gap Year explorations of 6-12 months or more.
While it’s not uncommon to find Australian backpackers working all over the world, Australia so embraces the value of travel and of living overseas that they have made it easy for Canadians and other non-Australians to spend time on a Working Holiday programme Downunder.
However, a recent change in Australian law means that anyone contemplating participating in the programme should do so sooner rather than later.
Australian Working Holiday visas are available for any Canadian aged 18-30 and are valid for up to one year in length. Applicants are not required to be students, however they must provide a letter from their bank proving to the Australian government that they have at least AU$5,000 with which to support themselves while in country. The multiple-entry visa currently costs AUD$420 and must be obtained before arrival in Australia.
Although it is not particularly complicated to obtain a Working Holiday visa online or from your nearest Australian embassy, there are a number of companies that will assist with the process and also help you to settle in and find employment.
Packages often include an arrival transfer and the first couple of nights accommodation. This helps travellers to catch their breath and settle in. They then provide an orientation to life and work in Australia and assistance to open a bank account, file taxes and include an Australian SIM card.
Packages also often provide some sort of access to an employment agency and help finding accommodation. In other words, they just give you that extra edge in making your year in Australia as smooth and enjoyable as possible right from the moment you arrive.
An Australian Working Holiday visa entitles you to work for the full 12 months of your stay (although no more than six months at one particular job) and study for up to four months.
There are no restrictions on the type of job that a visa holder may take, however many travellers find casual bar or restaurant work to be the easiest to obtain and one of the best ways to combine earning with having fun. Wages in Australia are generally higher than in Canada and because working abroad is very much an Australian way of life, employers are often quite happy to hire short-term staff from overseas. Currently, anyone on a working holiday visa is taxed at the same rate as an Australian citizen meaning that if they earn less than AU$18,200 they pay no tax at all. Up to AU$37,000, they are taxed at 19% and between AU$37,001 and AU$80,000 they pay a rate of 32.5% rate.
Effective July 1st, 2016 however, Australia will tax backpackers on Working Holiday visas at a rate of 32.5% regardless of their income.
While this increase will have a significant impact on Working Holiday visa holders’ finances and other countries including New Zealand, Ireland the United Kingdom have similar programmes, Australia’s climate, language, lifestyle and scenery are likely to ensure that the country remains a popular and appealing destination for Canadians seeking a work abroad opportunity.
Although it is only possible to take advantage of the Australian Working Holiday visa once, it is possible to extend the visa beyond the maximum 12 month period.
In order to do this, during your first year you must work a minimum of 3 months in a position specified by the government. These jobs include crop picking, herding cattle, landscaping, scaffolding and painting the interiors or exteriors of new buildings. Participation in any of those areas can enable you to extend your visa and stay in Australia for longer. Spending a year overseas on a Working Holiday visa can help you gain job experience, life experience and provide you with some truly unforgettable experiences.