Migrating to Australia – Tax Tips

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Migrating to Australia

Migrating to Australia is one of the most exciting and adventurous life events. Living in another country will have its challenges especially trying to understand a new tax system. We’ve compiled for your convenience a few important things you’ll need to know to help you flourish financially.

Here are just a few things you should know before you arrive, or at the least, before the end of the tax year inevitable comes around which is 30th June.

First things first

If you’re still in the planning stages of your visit to Australia and you plan on working while here, ensure you apply for a Tax File Number (TFN). Anyone working in Australia is required to have one and failing to do so will result in you being taxed at 45% of your income.

Understanding the Medicare Levy

Depending on your home country, you’ll be granted one of two Working Holiday Visas (417 or 462). The main difference being that with a Subclass 417, residents of 11 countries are eligible for the Reciprocal Health Care Agreement and therefore are required to pay the Medicare Levy at 2% of their taxable income.

Those who are granted a Subclass 462 are not eligible for the Reciprocal Health Care Scheme and therefore will be eligible to claim back the Medicare Levy with their tax return.

Tax rates

As a working holiday maker (read: backpacker) or foreign student, you’ll be considered a non-resident for tax purposes, which means you’re being charged at a slightly higher rate than residents. Unfair, we know, but it also means you’ll end up getting more back when you leave to head home.  

On all income up to $37,000 you’ll be taxed 15%. Any dollars earned thereafter jumps to 32.5%.

What can you claim?

Okay, here’s the good part. You’re eligible to claim back some expenses depending on your line of work.

We’ve put together a list of items which are deemed tax deductions given they are accrued directly in relation to your job and fall outside of the normal stuff you’d be expected to pay for (e.g. you can’t claim your commute to and from work, sorry!).


This includes travelling between job sites, meetings, or, if home is your main place of work, having to travel from home to attend work events.

If your job requires you to travel long distances or make overnight stays, you can claim the expenses you incur through accommodation, meals and transport. However, you can only claim up to the amount of allowance given by your employer and obviously, you won’t be able to account for these if they’re reimbursed.


While you can’t claim against the actual cost of your car (even if you’re purchasing it primarily for work) you can claim for depreciation based on the percentage of use for work, plus running costs, fuel, oil and maintenance.

If you want to claim a deduction for your car, there are two ways to go about it.

Keep a logbook for a minimum of 12 weeks recording the odometer readings when the car is being used for work purposes to submit as proof of use.

If you haven’t maintained a log, don’t worry, you can claim up to 5,000kms at the government accepted rate of 68 cents per kilometre. You don’t need to show fuel receipts, but in the event of an audit, you will need to be able to show how you calculated the total kilometres.


If you’re required to purchase clothing for work, whether it be a uniform or not, you’re able to claim a portion of these costs back. This is particularly relevant for any mandatory protective or preventive clothing such as hats and sunglasses. And don’t forget to account for cleaning fees!

Tools & equipment

If you work a job which involves the use of tools and equipment (such as a trade or construction work) and you’re having to personal finance the purchase or transport of these, these count as deductions on your tax return.

Here’s what other Working Holiday Makers got

Perhaps one of the times it really pays (literally) to compare yourself to others, is by understanding what your fellow Working Holiday Makers are claiming and how much they’re receiving on average.

The average tax return for a backpacker was $2,600. But that’s an average, and with POP Tax, we’re committed to guaranteeing you max your tax back. 

We’ve got plenty of tips for backpackers, so if you have questions about what you can claim, get in touch with us via our Live Chat service. Otherwise, head to the website to start your return today from only $19 (we know what backpackers wages are like).  

Don’t forget, as a non-resident, you’ll want to take your Superannuation with you when you depart Australia – while it’s heavily taxed (65%), it still puts some forced savings in the bank… or put it to good use with a stop off in SE Asia on the way home!


Please visit our site to get more information about the Australian Tax.

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