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Change of visa during same financial year - Tax rates TBC

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Good Morning,

 

I was on a working holiday visa from July 2018 till August 2018. I was then on a bridging visa with full working rights from September 2018 till June 2019. I worked during the whole financial year 2018/19 but my status changed. I am now trying to work on my tax return. 

 

Could you please confirm tax rate applicable to the income below and tax total which I need to pay?

 

- Jul-Aug18  WORKING HOLIDAY visa = $15,000 => ?

- Sept-Jun19 BRIDGING visa = $85,000 => ?

 

Thanks a lot in advance!

 

Kind regards,

 

F

 

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Hi @Flo,

 

Welcome to our Community!

 

If you're on a working holiday visa, you'll be taxed at 15% for the first $37,000 you earn. If your residency status changes during the financial year, you'll need to notify your employ by completing a withholding declaration to notify them of the change in your residency status and you elect to start claiming the tax-free threshold.


When your residency status changes part way through a financial year you're entitled to a pro-rata tax free threshold, however the way the tax is imposed on the working holiday maker component of your taxable income can mean that you don't get the benefit of the tax free threshold.

 

Effectively, the 15% rate for working holiday maker's income is worked out ‘first’ and then any other income is taxed to the extent that it falls into any higher income bracket because of the treatment of the working holiday maker income.

 

For example, if an individual earns $18,200 as a working holiday maker during the year and earns $18,800 as a resident of non-working holiday maker income then total taxable income is $37,000.

 

The first $18,200 is taxed at 15% as working holiday maker income. The remaining $18,800 is taxed as a resident, taking into account the working holiday maker income. Hence this amount falls into the resident tax rate of $18,201 to $37,000 of 19%. The $18,800 amount is thus taxed at the rate of 19% and the tax free threshold cannot be utilised for this component of the taxable income.
 
If the normal income received was greater than $18,800, then this would push the tax rate of such income into the next resident rate of tax band of 32.5% for taxable incomes between $37,000 and $90,000.

 

As we can provide general information here on our Community, when you lodge your income tax return we'll calculate how must tax you're required to pay based on your situation and how much you've had withheld. If you've had too much withheld you'll receive a refund and if not enough tax has been withheld you'll have an amount to pay.

 

Hope this helps, JodieH.

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Hi @Flo,

 

Welcome to our Community!

 

If you're on a working holiday visa, you'll be taxed at 15% for the first $37,000 you earn. If your residency status changes during the financial year, you'll need to notify your employ by completing a withholding declaration to notify them of the change in your residency status and you elect to start claiming the tax-free threshold.


When your residency status changes part way through a financial year you're entitled to a pro-rata tax free threshold, however the way the tax is imposed on the working holiday maker component of your taxable income can mean that you don't get the benefit of the tax free threshold.

 

Effectively, the 15% rate for working holiday maker's income is worked out ‘first’ and then any other income is taxed to the extent that it falls into any higher income bracket because of the treatment of the working holiday maker income.

 

For example, if an individual earns $18,200 as a working holiday maker during the year and earns $18,800 as a resident of non-working holiday maker income then total taxable income is $37,000.

 

The first $18,200 is taxed at 15% as working holiday maker income. The remaining $18,800 is taxed as a resident, taking into account the working holiday maker income. Hence this amount falls into the resident tax rate of $18,201 to $37,000 of 19%. The $18,800 amount is thus taxed at the rate of 19% and the tax free threshold cannot be utilised for this component of the taxable income.
 
If the normal income received was greater than $18,800, then this would push the tax rate of such income into the next resident rate of tax band of 32.5% for taxable incomes between $37,000 and $90,000.

 

As we can provide general information here on our Community, when you lodge your income tax return we'll calculate how must tax you're required to pay based on your situation and how much you've had withheld. If you've had too much withheld you'll receive a refund and if not enough tax has been withheld you'll have an amount to pay.

 

Hope this helps, JodieH.

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Hi JodieH,

 

Thanks a lot for your answer. It's very clear. It's now time for me to get my cheque book.

 

Cheers,

Flo