How Do I Get My Holiday Tax Refund?

Holiday Tax Refund

Dear Essential Travel,
I've just come back from a working holiday in Canada and I heard that you can get tax back on your return home. How do I get a tax refund? Bridgette Willers, Plockton

Dear Bridgette
You are quite right, it is possible to get some money back at the end of your working holiday in certain countries. The tax refund is mostly for mandatory deductions from your salary or a refund of Value Added Tax or VAT, also known as GST - Goods and Services Tax - in New Zealand and Australia. We've put together the tax refund process for four of the most popular working holiday destinations: Australia, Canada, New Zealand and the US.

Australia

Working holiday makers in Australia contribute to a superannuation fund, otherwise known as pension fund, whilst they work in the country. Superannuation contributions kick in for people earning more than A$450 per month. You may claim back those contributions when you leave the country, but you receive your rebate only once your visa has expired and you've returned home. Working holiday makers are defined as either visiting the country for less than six months or visiting for more than six months and working in various locations throughout your stay (i.e you are not rooted).

What do I need to do?
You can start the process whilst you are still in Australia, but you may only submit your application - and receive your money - once you've left. You will need the following to complete the process (ask your employer for the last two items):

  • Personal details
  • Passport Number
  • Superannuation Fund name and account number
  • Australian tax file number
  • Home postal address

Begin the process by visiting the online application form at DASP Online Application. A mailed cheque payment will be made out to you with a deduction of 35% for withholding tax.

To read more about the process visit www.ato.gov.au

Canada

Your tax status in Canada is determined by how long you stay in the country over a 12 month period: stay for more than 183 days in a 12 month period and you are classified as a resident taxpayer, stay less than that amount and you are classified as a non-resident employee and you can claim tax back.

What do I need to do?
You need to file a tax return in order to find out if you there any rebates you qualify for. Tax Returns must be filed on or before April 30 in the following year (i.e. file by April 30, 2012 for the tax year 2011).

To read more about taxation for non-residents visit www.cra-arc.gc.ca or download the guide to taxation for non-residents.

New Zealand

New Zealand has a different tax rebate scheme from Australia. Like Canada your tax status is determined by how long you stay in the country over a 12 month period: more than 183 days in a 12 month period and you are classified as a resident taxpayer, less than that and you are classified as a non-resident employee.

Trying to get a tax rebate is useful for the latter, but often not for those who are in effect taxed as if they were New Zealanders. Everyone is taxed according to a Pay As You Earn (PAYE) scheme, with deducted contributions to the Accident Compensation Corporation (ACC), which also covers non-resident employees and therefore is not refundable.

What do I need to do?
You may get a tax refund if you've overpaid your taxes, but be aware that if you've underpaid you will be liable for the shortfall. Check this page to see if you have been taxed correctly or to get a tax assessment done. Getting a tex assessment requires filling out a Refund Application (IR50) and a Tax Return (IR3) before leaving the country. For these forms you will need the following:

  • IRD tax number
  • Personal details
  • Home Bank Account details and Postal Address
  • Confirmation of earnings
  • Proof of PAYE and ACC deductions
  • Proof of airline tickets and/or travel itinerary

To read more about taxation for Working Holiday Vistors visit www.ird.govt.nz

United States

Working Holiday Visitors, with J1 visa's, are classified as non-resident aliens by the Internal Revenue Service (IRS). Two types of income are taxed according to their scheme for nonresident aliens: Effectively Connected income (mostly income derived from employment) and Fixed, Determinable, Annual, or Periodical (FDAP) income (passive investment income from property, stocks etc). Most Working Holiday Visitors will be taxed on the former - income from employment.

What do I need to do?
You may receive a tax rebate if you have overpaid your taxes. The IRS requires that all Working Holiday Visitors who earn more than $5,800 (about £3,700) in a tax year file a tax return. The return is filed on the fifteenth day of the fourth month of every year (or the closest business day to that date). Rebates expire 16 months after the tax filing date, which means you can't get that money back unless you file your tax return on time.

To read more about taxation on non-resident aliens read www.irs.gov or download their guide on taxation for aliens.

Please note that all tax details were correct as of 1/3/2012. Check the respective tax authority websites to get the latest tax codes.

Last Updated: March 2012

Gugulethu Hlekwayo

Gugulethu Hlekwayo

A timid traveller, but a traveller none the less; Gugulethu is in his element lost and without a map - preferably with a companion willing to listen to his tall tales. He's our resident expert on the best muffins in town.