mvlv

Our son worked in Australia for 4 months on a travel/work visa. About 30% of each pay cheque was withheld for tax purposes. Can he recover this before leaving for home (Canada) and if so how?
Thank you.

vbca

Not sure about Aust, but I imagine it is thesame as NZ. if he worked here the tax is deducted on the assumption that he would be working and earning for a full year. As he only worked for 4 months his annnual income would be 33% of what he was assessed at, so he should be due for a refund.
He should obtain a tax assessment form from IRD on which he will enter the period he worked, what he earned, and the tax he paid. With a bit of luck he should be due for a refund. NZ IRD does not pay refunds into overseas bank accounts, so you would need to take the refund as a cheque. Aust may differ in this. No doubt they have a web site where you can download the relevant forms, and get more information.

Neil_Oz

Your son should phone the Australian Taxation Office (although the answer is probably somewhere on their website, www.ato.gov.au).

His employer may also have been deducting 9% of his gross pay as a compulsory Superannuation Guarantee Levy - most employees are asked to nominate which superannuation (pension) fund they wish the money to be credited to, but in some cases there's no choice. I think this too should be refundable, although the fund may charge an exit fee. (Check this with the ATO, though - for all I know the levy is waived for overseas workers in your son's situation).

Neil_Oz

I meant to say that your son would have been issued a 9-digit Tax File Number (TFN) - he should have that on hand when he talks to the ATO.

Neil_Oz

And just to add to the confusion by picking up on vbca's point ... it's normal for new non-permanent employees to be given a choice of how they wish to be taxed.

One option is to be taxed at a higher rate based on extrapolating their weekly pay to an annual figure - e.g. if they're on $900 a week, they're taxed as though they'll be earning $900*52=$46,800 in that year. But if they work for only 4 months of that year, their final tax assessment will be based on what they actually earned (say $15,000), which will attract a lower real tax bill. In that case they'll typically receive a refund cheque/bank deposit.

If they've opted to be taxed at the lower rate reflecting their expected real earnings, the final assessment will usually produce a small extra payment or refund.

The financial year for tax purposes is 01 July to 30 June.

mvlv

Thank you both very much !
Lise