How Your Tax & DASP Are Taxed

ALITAX · Bilal Jivraj — Registered Tax Agent 25287564. Original guidance from 10+ years of DASP and tax casework.

This is the chapter that shows you where every number comes from. Your super and your tax refund are each taxed in their own way — here’s how, with real worked examples. (Figures here are illustrations to show the method; your actual amounts depend on your income and circumstances.)

Part 1 — DASP tax on your super

When your super is paid out as a DASP, tax is taken from it before you receive it. The rate depends on your visa type:

• Working Holiday Maker (417 / 462) super — taxed at the WHM DASP rate of 65% on the taxed element. This high rate applies if any of your super was earned while you held a working holiday visa.
• All other visas (485, student 500, 482/457, PALM, and most others) — taxed at the standard DASP rate of 35% on the taxed element (and 45% on any untaxed element, which is uncommon).

Part 2 — How your income tax refund works

Your tax refund comes from the difference between the tax your employer withheld from your pay and the tax you actually owe once your return is done. Whether you get the tax-free threshold depends on your residency.

Resident for tax purposes

Residents get the tax-free threshold — the first portion of income each year is tax-free — then pay progressively higher rates above that. If your employer withheld tax as if you’d earn a full year’s wage but you only worked part of the year, you’ve likely overpaid, and that’s your refund.

Part-year tax-free threshold (if you left early)

If you became a resident partway through the year, or left partway through, your tax-free threshold is pro-rated for the months you were here — you don’t always get the full amount. We calculate the correct part-year threshold so your return is accurate and you’re not over- or under-claiming.

Foreign resident tax

Foreign residents do not get the tax-free threshold and are taxed from the first dollar at foreign-resident rates. Many short-stay and PALM workers fall here — which is why getting your residency right is so important to your refund.

Working holiday maker tax & the NDA exception

Working holiday makers are generally taxed under a special schedule from the first dollar of working-holiday income. But if you are a national of a non-discrimination-article (NDA) country and a resident for tax purposes, you may be entitled to be taxed like a resident — with the tax-free threshold — which can substantially increase your refund. See the NDA Country Working Holiday chapter.

Part 3 — Medicare levy & surcharge

The Medicare levy is 2% of taxable income that most residents pay. But many temporary visa holders are not entitled to Medicare — and if you’re not entitled, you shouldn’t pay the levy. You claim an exemption with a Medicare Entitlement Statement.

The Medicare levy surcharge is an extra charge for higher earners without private hospital cover — but if you’re exempt from Medicare, the surcharge generally doesn’t apply to you either. Getting the exemption right can add hundreds of dollars back.