The 65% Super Trap — Changing From a Working Holiday Visa
ALITAX · Bilal Jivraj — Registered Tax Agent 25287564. Original guidance from 10+ years of DASP and tax casework.
Thousands of backpackers come to Australia on a Working Holiday visa (subclass 417 or 462), then later change to a student visa (500), a 482 Skills in Demand visa, a former 457, a temporary partner visa (820 or 309), or another temporary visa.
When they eventually leave, they can usually claim their superannuation through DASP. But there is a tax rule that catches almost everybody out.
Example 1 — same super fund for both visas
You worked in Australia for three years. Year 1 on a Working Holiday visa in hospitality, earning $3,000 in super. Years 2 and 3 on a student visa, earning another $12,000. You used the same super fund throughout.
| Visa | Super earned |
|---|---|
| Working Holiday visa | $3,000 |
| Student visa | $12,000 |
| Total super | $15,000 |
You might expect the first $3,000 to be taxed at 65% and the remaining $12,000 at 35%. Unfortunately that is generally not how it works.
Because the single DASP payment contains contributions attributable to your Working Holiday visa, its entire taxable component is subject to the 65% rate. Assuming the full balance is a taxable component taxed element:
| Calculation | Amount |
|---|---|
| Total super | $15,000 |
| DASP tax at 65% | −$9,750 |
| Money you receive | $5,250 |
You lose $9,750 in DASP tax — when only $3,000 was ever earned on the Working Holiday visa.
Example 2 — a separate fund after the visa change
Same person, one difference: when the Working Holiday visa ended, they opened a new super fund for their student visa employment and kept the accounts separate.
| Fund | Tax | Net payment |
|---|---|---|
| Fund A — Working Holiday ($3,000) | 65% | $1,050 |
| Fund B — Student visa ($12,000) | 35% | $7,800 |
| Combined ($15,000) | $8,850 |
Potential difference: $3,600 more in your pocket.
Why? Each super fund determines the tax treatment of its own DASP payment based on the information it holds. Where one payment contains Working Holiday contributions and another genuinely does not, different rates may apply.
Example 3 — Working Holiday to a 482 visa
You accumulated $5,000 in super on a 417 visa, then changed to a 482 and accumulated another $25,000, using the same fund throughout. Assuming the full $30,000 is a taxable component taxed element:
| Calculation | Amount |
|---|---|
| Total super | $30,000 |
| DASP tax at 65% | −$19,500 |
| Net payment | $10,500 |
Had the $5,000 and $25,000 remained in separate funds, with no Working Holiday contributions in the second:
| Fund | Tax | Net payment |
|---|---|---|
| WHM fund — $5,000 | 65% | $1,750 |
| Non-WHM fund — $25,000 | 35% | $16,250 |
| Combined | $18,000 |
Potential difference: $7,500.
What to do when you change visas
At ALITAX, our advice is simple: if you are moving from a Working Holiday visa to a student, partner, 482 or other non-Working-Holiday visa, do not automatically keep using your existing super fund without reviewing the consequences. One option worth considering is a separate complying super fund for the new visa period.
- Keep your original records. Download statements showing the contributions received while you held the Working Holiday visa.
- Consider a new super account before you start work on the new visa.
- Give your employer the correct details using the ATO Superannuation Standard Choice Form. Do not assume a new employer will use the new account — your existing stapled fund may be used by default.
- Check your contributions are actually landing in the fund you chose.
- Be careful with rollovers. Moving super between funds can change the composition and tax treatment of a future DASP payment.
Is a second fund always the right answer?
No — and we will tell you so. More than one account can mean extra fees, duplicate insurance premiums and more admin. Changing funds does not erase your visa history or change the legal character of contributions already made. And if you later become an Australian permanent resident, you may not be eligible for DASP at all.
The goal is to understand the consequences before you make changes, not after.
The DASP rates, in full
| DASP component | Ordinary rate | WHM rate |
|---|---|---|
| Tax-free component | Nil | Nil |
| Taxable component — taxed element | 35% | 65% |
| Taxable component — untaxed element | 45% | 65% |
For most backpackers with ordinary employer contributions in a taxed fund, the comparison that matters is 35% versus 65%.
The rule sits in section 5(3) of the Superannuation (Departing Australia Superannuation Payments Tax) Act 2007. You can read the official guidance on the ATO DASP page and the legislation itself.
Common questions
I am on a student visa now — will I pay only 35%?
Not necessarily. If your DASP payment includes contributions attributable to an earlier Working Holiday visa, the taxable component can be taxed at 65%.
What if I already mixed my super together?
You cannot assume that transferring the balance to another fund restores the 35% rate. The contribution and rollover histories need to be examined. At ALITAX we check this properly before anything is lodged.
Can I recover the 65% through my tax return?
Generally no. DASP withholding is final, and correctly withheld DASP tax is not normally refunded through an income tax return. That is exactly why the planning has to happen beforehand.
I never held a Working Holiday visa.
The ordinary rates apply — normally 35% on a taxed taxable component.
Speak to Bilal Jivraj — WhatsApp +61 422 665 268 or bilal@alitax.com.au.
General information only — not personal tax, migration or financial product advice. Separate super accounts do not guarantee a particular DASP tax outcome. Consider fees, insurance, contribution histories and professional advice before changing funds.
🎥 Spoken version — video script (about 80 seconds)
Read straight to camera. Pause at each line break.
If you came to Australia on a working holiday visa, and then changed to a student visa, or a 482, or a partner visa — I need ninety seconds of your time. This one mistake costs people thousands.
Here is the rule almost nobody knows.
When you claim your super on leaving Australia, working holiday super is taxed at sixty-five percent. Most other visas are taxed at thirty-five percent.
Now here is the catch. If your super payment contains any money earned while you were on that working holiday visa — the whole payment can be taxed at sixty-five percent.
Not just the working holiday part. All of it.
Let me show you what that means.
Say you earned three thousand dollars of super on a working holiday visa. Then twelve thousand more on a student visa. Same fund the whole time.
Fifteen thousand dollars. Taxed at sixty-five percent. You receive five thousand two hundred and fifty.
Now imagine you had opened a separate fund when your visa changed. The working holiday money taxed at sixty-five. The student visa money taxed at thirty-five.
You would receive eight thousand eight hundred and fifty.
Three thousand six hundred dollars. Just from keeping them separate.
So if you are changing visas — stop before you give your new employer your old super details.
But please be careful. A second account means extra fees and insurance. And if you have already mixed the money together, moving it now does not undo it.
This is worth getting checked properly, before you do anything.
[End — on-screen: alitax.com.au/dasp · WhatsApp +61 422 665 268 · Registered Tax Agent 25287564]