When a temporary resident claims their Australian superannuation as a Departing Australia Superannuation Payment (DASP), the payment is subject to withholding tax. The rate depends on the type of visa held and the tax component of the super benefit.
DASP Tax Rates
| Visa type at any time during Australian work | DASP tax rate |
|---|---|
| Working Holiday Maker (subclass 417 or 462) | 65% |
| Other temporary visa holders (457, 482, 500, student, etc.) | 35% |
The 65% WHM rate was introduced from 1 July 2017 and was controversial — many working holiday makers received much less than expected when claiming their super.
How DASP Tax Is Calculated
The DASP tax applies to different components at different rates:
For Standard Temporary Visa Holders (35% rate)
| Tax component | DASP tax rate |
|---|---|
| Taxed element of the taxable component | 35% |
| Tax-free component | 0% |
| Untaxed element (uncommon in most funds) | 45% |
Most accumulation super balances consist primarily of the taxed element — meaning the 35% rate applies to the vast majority.
For Working Holiday Makers (65% rate)
| Tax component | DASP tax rate |
|---|---|
| All components (taxed and tax-free for WHM) | 65% |
The WHM rate of 65% applies across all components — including the tax-free component (which is normally untaxed for Australian residents). This effectively makes the WHM DASP rate higher than the Australian top marginal rate of 47%.
Example: DASP Calculation
Working holiday maker with $15,000 in super:
- Total super balance: $15,000
- DASP tax (65% of $15,000): $9,750
- Net DASP payment: $5,250
Other temporary resident with $15,000 in super (all taxed element):
- Total super balance: $15,000
- DASP tax (35%): $5,250
- Net DASP payment: $9,750
Why the WHM Rate Is 65%
The Australian Government significantly increased the WHM DASP tax rate in 2017 (from a lower effective rate) on the basis that:
- WHMs were using the DASP as a mechanism to effectively receive tax-free remuneration
- The SG was seen as part of the employment cost, and the government wanted to reduce the attractiveness of this arbitrage
The change was controversial — many WHMs, particularly from the UK and Ireland, felt the increase was unfair given contributions are made from their earned income.
Can You Reduce DASP Tax?
No — the DASP withholding tax is applied by the fund before payment and is not refundable. You cannot lodge a tax return to recover the withheld tax. The rate is set by legislation.
DASP and the Tax-Free Component
For Australian residents, the tax-free component of super (from non-concessional contributions) is received tax-free at any age. However, for WHMs, the 65% rate applies to the tax-free component as well — removing this usual benefit.
For non-WHM temporary residents, the tax-free component is received at 0% DASP tax, as with Australian residents.
For more: DASP — How to Claim Super When Leaving Australia, Super for Working Holiday Makers, Super for Temporary Residents. For advice on your situation, speak with a licensed financial adviser via MoneySmart.