Residency for Tax Purposes: WHM Deep Dive 2025 

Published: 29th September 2025 Gotax Publlishing

If you’re a Working Holiday Maker (WHM) in Australia on a 417 or 462 visa, you’re probably here for a good time — not forever. But while you’re surfing, farming, or pulling beers in Bondi, the ATO still wants its slice. And whether you’re classed as a resident or non-resident for tax purposes makes a huge difference to your tax return.

This guide gives you the straight-up Gotax rundown on residency rules, common traps, and what it all means for your tax return in Australia.

What Is Tax Residency?

Tax residency is how the ATO sees you for tax purposes — not what your visa says. Immigration rules and tax rules are two separate games. You can be:

• A resident for tax

• A foreign resident for tax

• Or switch mid-year if your lifestyle changes.

How Does the ATO Decide?

The ATO runs a few tests:

• The resides test – Are you living here like it’s your home?

• The 183-day test – Have you been in Australia for more than half the year with the intention to stay?

• The domicile test – Is your permanent home in Australia?

• The superannuation test – Mainly for government workers.

Most WHMs don’t pass the first three, so they’re foreign residents for tax purposes.

Real-Life WHM Examples

• Roberto (Italy): Works farms, moves around, stuff still at Mum and Dad’s in Italy → Foreign resident.

• Sarah (UK): Arrives on a 462 visa, gets a full-time job, 2-year lease, applies for PR → Resident from when her intentions changed.

• Lucas (Brazil): Hostels + odd jobs + booked return ticket → Foreign resident.

• Anna (Germany): Finds love, signs a long lease, joins local footy → Resident from when lifestyle changed.

Common Pitfalls for WHMs

• Thinking visa = tax residency (nope).

• Not telling your employer your correct status (wrong tax rate).

• Assuming you get the tax-free threshold (most WHMs don’t).

• Forgetting your tax situation can change mid-year.

• Ignoring the superannuation cash-out rules.

• Not keeping records of when you arrived, worked, or moved.

What Does Residency Mean for Tax?

Foreign Residents (most WHMs):

• 15% tax on the first $45,000, then higher rates.

• No tax-free threshold.

• No Medicare levy.

• Limited deductions.

• No CGT discount.

Australian Residents:

• Tax-free threshold ($18,200).

• Lower marginal rates after that.

• May pay Medicare levy.

• Can claim more deductions.

• Eligible for CGT discount.

What If You Switch Mid-Year?

If your lifestyle changes (say, from backpacker to long-term local), your tax status changes too. That means:

• Income before = foreign resident rates.

• Income after = resident rates.

• You may need a part-year tax return.

Superannuation for WHMs

• Employers must pay super for you.

• Leaving Australia? You can claim it back via Departing Australia Superannuation Payment (DASP).

• But beware: tax hits hard on the way out (35%–65%).

Medicare Rules

• Foreign residents don’t pay the Medicare levy.

• You also can’t use Medicare unless your country has a reciprocal agreement (UK, NZ, Italy, etc.).

20 WHM Residency Gotax Online Q&As 

Am I a resident for tax if I’m on a 417/462 visa?

Usually not. Most WHMs are foreign residents unless you act like a local.

Can staying in Australia for 6+ months make me a resident?

Not automatically. It’s about lifestyle and intentions, not just days.

Do WHMs get the tax-free threshold?

No. Foreign residents pay tax from the first dollar.

What tax rate applies to WHMs?

15% up to $45,000, then higher rates.

Do I pay the Medicare levy as a WHM?

No, unless you become a resident for tax.

Can I claim tax deductions as a WHM?

Yes, but only against Aussie-sourced income.

What if I become a resident halfway through?

Your tax rates change from that point. Split income between the two.

Do I need to lodge a tax return?

Yes, if you earn income in Australia.

Can I lodge before leaving Australia?

Yes, you can lodge a departing return early.

Can I be a resident for tax but not for immigration?

Yes. They’re different systems.

Does having a home overseas matter?

Yes. It’s a big sign you’re still a foreign resident.

Do I get CGT discounts?

Only if you’re a resident for tax.

If I apply for PR, does my residency change?

Yes, from the time your lifestyle and intentions shift.

Do I need to tell my employer my tax status?

Yes, so they withhold the right rate.

Can WHMs get a tax refund?

Yes, if you’ve overpaid tax.

Does working in multiple states affect residency?

No, residency is about lifestyle, not geography.

Can I claim travel costs?

Only if directly tied to earning income.

If I buy a car, does that affect residency?

No. But you can claim if used for work.

Do I need an Aussie bank account?

It makes life easier, but doesn’t decide residency.

What if I marry an Aussie?

If you settle, you may become a tax resident.

What now?

WHM residency is not about your visa, it’s about how you live.

• Most WHMs are foreign residents.

• Your tax changes if you become a resident mid-year.

• Keep records, check your status, and tell your employer.

And when in doubt? Let Gotax handle it. We make Working Holiday tax returns simple, fun, and compliant.

Start your return now: https://www.gotax.com.au/guest-user

For rental property returns: https://www.gotax.com.au/rental-property-tax-return
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