Firstly, before you start working in Australia, you need to apply for an Australian Tax File Number (TFN).
When you start work (and each time you change employers) you will be given an Employment Declaration Form. Your employer is obliged
by law to give you one of these forms and ensure that your completed form is sent off to the taxman (ATO) within 28 days of
you starting work.
How you answer this question (Are You A Resident or a Non-Resident) is very important.
It is a complete myth that you will automatically get all your tax back when you leave Australia!
It is very common to hear both backpackers and employers say that you will get your tax back when you leave Australia. If you are, or have declared that you are a Non-resident then this assumption is totally WRONG! and even if you are a Resident for tax purposes it still doesn't mean that you will automatically get all or even any of your tax back.
The confusion continues where some employers will insist that you are a Non-resident for tax purposes and direct you to fill in
your Employment Declaration accordingly. They have NO RIGHT to do this as Australias' tax system is a 'self assessing system'
meaning the relationship we have with regards tax is purely between 'us' (as individuals) and the taxman (and possibly the
Administrative Disputes Tribunal or the Australian Federal Court if there is a dispute).
The simple rule of thumb to help decide if you are a Resident or a Non-Resident for tax purposes in Australia is this
If the nature of your working holiday visit to Australia is one of mostly travel with only a little bit of work here and there, then you are probably going to be a Non-Resident for tax purposes and happy to pay tax at the correct rate because you don't want hassles and possibly a big tax bill at the end of your visit....
if the nature of your working holiday visit to Australia is more one of work i.e. many travellers feel that the only way to truly learn about a country is to live and work in it, then the chances are that you will become a Resident for tax purposes. This is especially so if you intend to apply for a second 12 month extension of your working holiday visa and or if you can show that you lived and worked in the same place for at least 183 days i.e. 6 months within the same tax year i.e. between 1st July and 30 June the following year.
At the end of the day, the matter of whether you are a resident or a non-resident for tax purposes is between you, the taxman and if you both can't agree, the court.
In summary, it is important to keep records of all your earnings (pay slips) including superannuation, work related outgoings i.e extra ordinary expenses incurred as a result of your work (may be tax deductible), employer details i.e. business name, address etc, start and finish dates with different employers etc. Make sure your employers have an up to date address to which to send important end of tax year summaries etc.
Don't let a failure to take Tax matters seriously spoil your otherwise great Australian working holiday experience!
Go here if interested in working as a self employed contractor here and or talk to an accountant. Suitable for tradespeople e.g. chefs, hairdressers, electricians etc and also suitable for itinerate fruit pickers working 'on contract at piece rates'. You would need to get an Australian Business Number (ABN) which you can do quite easily online at here
A travellers blog that may be useful here