If your monthly wage is more than $A450, your employer must contribute an additional sum equal to 9.5% of your wage into a superannuation (pension) account for you. If you entered Australia on an eligible temporary resident visa you can, in most cases, access your contributions when you leave Australia, although the contributions will be taxed.
Tax for working holiday makers.
It is a complete myth that you will automatically get all your tax back when you leave Australia! There is a lot of confusion out there amongst, not only working holiday backpackers but also amongst many employers and even some accountants and tax agents.
What is superannuation?
Superannuation is a compulsory retirement saving that is paid by your employer. It is compulsory for employers to pay a minimum of 9.5% of your
wages in superannuation if
- you are over 18, and
- earn more than $450 a month from that employer.
It does not matter if you are working as permanent or casual, or if your resident or non-resident for tax purposes. Your employer must pay superannuation for you if you meet the above criteria.
The superannuation paid by your employer is taxed at 15% by the ATO
As stated above, your employer must make a minimum superannuation contribution of 9% of your ordinary time earning, which is similar to your wages. However, this 9% is based on your pre-tax earnings.
E.g. if you earned $500 pre-tax and you received $450 after tax, your employer has to pay 9.5% of your pre-tax earning i.e. 9.5% x $500 = $47. Therefore, you should receive a superannuation contribution of $47 per week.
However, if you check your superannuation balance, the balance will likely show a lower amount. This is because:
- 15% tax is deducted from your contribution
- Superannuation fund constantly charges administration fee and insurance fee on your contribution which can amount to about $5-10 a week.
E.g. If you earned $500 a week for 10 weeks and later checked your balance in your superannuation fund, you should have:
- $47 per week x 10 weeks = 470
- minus 15% tax of $70.5
- minus any administration and insurance fee.
Therefore, your superannuation balance will be $399.50 minus any administration and insurance fee.
The superannuation has to be paid at least on quarterly basis. This means that the employer must at least pay once every 3 months and is due 28th day after the end of the quarter.
IF YOU WORKED BETWEEN: YOUR EMPLOYER MUST PAY YOUR SUPERANNUATION BY:
* if the 28th falls on a weekend or public holiday, then next business day.
For example, if you worked at a farm from 1 January to 20 April 2010, your employer must pay your superannuation on:
- 28 April for superannuation you earned between 1 January and 31 March 2010; and
- 28 July for superannuation you earned between 1 April to 20 April 2010.
Therefore, if you finished work on 20 April and tried to claim your superannuation straight away from your superannuation fund, you will be missing out on your superannuation you earned from 1 April to 20 April, which will usually be paid by your employer on 28 July. If you are unsure if all your superannuation has been paid, you should ask your employer. Alternatively, you can wait until 28 July 2010 before claiming for your superannuation payment.
Although it is a legal requirement for your employer to pay your superannuation, it is true that some employer does not make the superannuation
contribution to your superannuation fund. If you suspect that your employer is not paying your superannuation or if you are unsure, your first
contact should be directly with your employer.
If the employer states that they have paid but you can’t find any evidence, please ask them for details of your superannuation fund and contact superannuation fund directly to see if your account has the correct balance.
If your employer refuses to pay or does not provide you with any evidence of payment, then you can make a complaint to the Australian Taxation Office. The following ATO link provides more information regarding superannuation.
If you need help with contacting the ATO about your unpaid superannuation, tax professionals can assist you with this matter.
You can ask your employer about which superannuation fund you belong to. Once you have this information, you can call the superannuation fund with your name, date of birth and other information to find about how much superannuation is in your account. Working holiday makers and students are allowed to withdraw their superannuation if they permanently leave Australia and their visa expires. The Australian government takes out further 35% tax when you apply for the withdrawal. You can contact your superannuation fund or a tax professional regarding withdrawal your superannuation. We work with an independent tax adviser who can help you with claiming any refunds you may be entitled too.