Claiming tax back after WHV
Replies: 25 - Last Post: Jul 11, 2013 8:40 AM Last Post By: Adam008
Mar 6, 2011 9:52 PM
Claiming tax back after WHVHello!
Just about to finish the WHV in Australia, heard that on the WHV you can claim all of the tax you had paid back once you have left. Has anyone done this and if so could you advise on the process?
Mar 7, 2011 12:13 AM
1Legally, you are required to pay 29% of your income as tax, since you are a non-resident for tax purposes.
But if you talk to your comrades in hostels, etc, they will advise that there are "tax back" companies that will achieve a much higher return than that - and the only way they can do that is (illegally) claim that you were a resident (for tax purposes) for the period of your WHV. You can go down that path if you wish - and pay a hefty fee to these companies of course. Up to you.
Mar 7, 2011 5:11 AM
2Also, if you've made any purchases over $300 you can get your GST back at the airport under the Tax Refund Scheme. I think I remember something about having to buy it in the month before your departure...there are other conditions too, but it does help if you are looking at buying a nice camera/video cam etc before you leave.
Mar 7, 2011 9:56 AM
3ianw6705 - its not necessarily "illegal" to be a resident for tax purposes as a backpacker. I was quite ligimately a resident for tax purposes.
The ATO has specific guidance for if you qualify when you do your tax return to be considered as a resident for tax purposes.
For me, it was because I lived as an Australian lived for a significant period of time instead of travelling around doing jobs here and there.
I worked for 6 months for one company and rented an apartment. The ATO were happy to consider me a resident for tax purposes and I didn't use a tax agent to change myself from non-resident on my tax return to resident.
Also - If you do use a taxback company, you can usually pay them less than $100 to do it for you.
Mar 7, 2011 12:59 PM
4The misconception that alot of WHV people have is that they will be able to get ALL the tax back that they have paid whilst in Australia. This simply isn't true. To begin with, in order to obtain any refund you need to obtain statements of earnings from all your employers, and they won't be provided until July of this year. Once you have those, you can go to the ATO website, look for the estimate income tax page, and work out how much tax you should be paying on that page. The difference between that and what you ACTUALLY paid, is what your refund will be.
You can obtain a refund of all the superannuation you paid whilst in Australia. The information for that is also on the ATO website.
I'm not going to provide links because this subject has been done so many times that if the OP is too lazy to look then more fool him/her.
#4 settle down. If you are resident in the country for a period of at least 6 months and pay tax, then you are a resident for tax purposes.
Edited by: KoalasRule
Mar 7, 2011 1:20 PM
5Yes I agree that people think they will always get all their tax back and you are right that this isn't true. Resident or non-resident, you have to pay some elemannt of tax.
However, you are wrong that you have to wait until after the tax year to get your statement of earnings from your employer. I was in Oz for 2 different tax years. The first one (June 09 to 10) obviously I had to put in my return at the end of the tax year. However, I was leaving the country in December 2010 and if you are leaving the country before the end of that tax year you can ask your employer(s) for your statement of earnings early and put in your tax return early. The two agencies I worked for were fine and easy about providing this but the private firm I worked for I had to chase a bit as they weren't sure about it and had to find out from the ATO how to do it, but I persisted explaining I had received the Statements from two other agencies so was just waiting for theirs to be able to put in my return.
Its best to ask the ATO for advice as to how to do this. You have to obtain a tax pack from the previous year (the only one that would be available) and the ATO say this is easy to do but isn't as most places send their unused tax packs back after a certain period of time. I had to in the end obtain one from an ATO office which wasn't that easy to do whilst on the road.
You have to clearly mark your form that it is an early application and which year it is for, and fill out an additional form relating to early claiming.
You CAN'T do this online. To ensure I did it correctly I went to an ATO office to get advice and got them to check I filled in everything I needed to.
You don't get ALL your superannuation back. I have just received my cheque for my super - less federal taxes, account keeping fees, insurance premiums but plus interest. Altogether they deducted about $320 from it.
Not sure why you asked me to "settle down" - was only giving the OP the benefit of my experience and research and correcting others :-)
Mar 7, 2011 1:21 PM
Mar 7, 2011 3:35 PM
7You can't delete the post yourself - you can ask the mods to do it for you - just click on the little flag.
ianw6705 - its not necessarily "illegal" to be a resident for tax purposes as a backpacker. I was quite ligimately a resident for tax purposes.
English is a tricky language, with lots of room for ambiguous meanings. I meant that those people who use the tax-back companies do so because they wish to illegally claim resident status, even though a backpacker.
But I wasn't necessarily implying the converse - that all backpackers must be non-residents; if you can claim resident status legally, then you obviously do not need the tax-back company. There have been court cases that were just like yours, that the tax office lost - where someone has had a steady life for six or more months.
Mar 7, 2011 3:42 PM
8oh im not too worried just looked stupid with two slightly different posts as I amended it after I wrote it up and tried to copy it in and - well anyway.
Hope you know I wasn't trying to aggravate anything, was just trying to give a bit more information to the OP. You are right, plenty of people do try to claim back more than they should and I was nervous about my tax claim in case the tax office came back to me in the future trying to get more money off me but I realised that I met all their criteria for being a resident for tax.
I didn't even do it on purpose, just arrived in Perth and didn't leave - at least it worked to my advantage.
Anyone know anything about the system in NZ? I'm going tomorrow and wonderd if its similar there?
Mar 7, 2011 4:03 PM
Mar 7, 2011 4:34 PM
11The NZ Tax is graduated and the weekly tax take will assume you get that weekly rate for the whole year. This means that if you only work for a small part of the year, you probably have had too much tax taken (the first step is at about $15k). The IRD doesn't care whether you're resident or not. If you want to claim a refund, you normally need to fill in a return - you don't need to file a return if you're happy at the amount of tax paid and the IRD assessment.
Mar 7, 2011 4:48 PM
12thanks Myshkin - that makes sense, sounds similar to the UK kind of - you get X thousand per year tax free then after that you get taxed at a certain amount up to X thousand and then at a higher rate after that, all assuming you work the full tax year. Guess I'll need to look into it more deeply when I know how much i've earnt. Quite like that they don't care if you are a resident or not as I wasn't planning in staying in one place as long as I did in Oz but in Oz its quite a big incentive in terms of tax breaks.
Mar 7, 2011 5:21 PM
13The Australian Tax Office applies a double whammy - or triple really. Firstly, if most backpackers are honest and tick the non-resident box on their declaration, then they not only get taxed at the NR flat rate of 29%, they also cannot claim the tax-free threshold ($6,000), nor access a range of other low-income tax breaks.
And even more, if you work for more than one employer at the same time (waiter in two restaurants, for example) then, even if you do claim residency, you cannot claim the tax-free threshold for more than one job, so all the others are taxed at a higher rate - and you have to wait the whole tax year before you can claim it back. Although if you have pretty steady dual jobs, you can make a s221D variation application to lower the tax withheld, but it's quite a bit of work to claim it.
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