09-Sep-2010 11:19 AM
Not everybody pays the same amount of tax. The tax payable differs depending upon whether you are a resident or a non-resident for tax purposes. This is different to permanent residency under immigration law. Many working holiday makers and students have been deemed to be a resident for tax purposes. There are various criteria for working out if you are resident or not. You can use the residency calculator at ATO’s website or talk about your situation with a tax agent. Usually you will be classified as a resident if you have stayed more than 6 months in Australia in one location and established a living pattern.
For example, if you earned $10,000 during one financial year, you would pay $600 in tax if you are resident or $2900 in tax if you are non resident. As you can see, there is a significant difference.
According to our experiences, most working holiday makers are residents for tax purposes. Also, Australian taxation system has many incentives for low income earners, especially for people earning under $30,000. Therefore, many working holiday maker and students often end up with a significant amount of tax refund.