Australia can be tough financially for young Irish workers. Here’s how to navigate money matters down under

More than 21,000 Australian working holiday visas were granted to young Irish citizens in 2023. Almost double the number granted the previous year, it is the highest number since the financial crash years.

The end of Australia’s Covid travel bans partly explains the sudden uptick in immigration there but the housing and cost-of-living crises here could equally be factors tempting young Irish people to explore opportunities in the Lucky Country. Then there’s the social media content that depicts life in Australia as a relentless stream of sunrise acai bowls on the beach.

A new genre of Aussie content is now popping up on TikTok with working holidaymakers from Ireland and Britain talking about how hard it is to make ends meet Down Under. Australia has its own version of a housing crisis (particularly in the rental market), its own cost-of-living price hikes and certain restrictions on the working visa that complicate finding employment in certain fields.

Some social media commentators have been brutally honest about their struggle to find a place to live and a steady job in their profession, all while surviving off dwindling savings at a time when prices are rising. The scriptwriters didn’t really show this on Home and Away did they?

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But don’t put away the sun cream and the cork hat just yet. For those heading off on their working holiday visa (or their worried parents who read this), here are some of the ways to minimise money hassle when visiting Australia.

Get your taxes sorted (before you go)

When it comes to taxes, Stephanie Wickham of ExpatTaxes.ie has one solid piece of advice for those heading off to Australia. “Get it done before you go.”

There are two good reasons for this – the first is to stay on Revenue’s good side.

“It’s wise for people to lodge a split year relief claim with Revenue before the end of the Irish tax year to ensure Ireland won’t seek to tax their Australian employment income earned after they have departed Ireland,” says Wickham. This can be done online via MyAccount or at a Revenue office.

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The second reason is you may be entitled to a tax refund which could be a handy addition to your Australia fund.

Travellers may get a “refund of Irish PAYE withheld at source if it has been over-withheld (this could happen for example if you leave part way through the Irish tax year and have not claimed all your tax credits before you leave)”, according to Wickham.

“For example, if you leave early in February 2024 and have been working full time before you leave, earning say €45,000 per annum, you may be entitled to a tax refund of circa €700 of taxes withheld at source under PAYE.”

Australians have a need to abbreviate everything, even our pensions system. ‘Super’ refers to superannuation

This could include credits such as rental tax credit but obviously you can only claim refunds on the PAYE tax you actually paid in the year you leave.

This is where timing plays a role: if you left, for example, on January 2nd, you may not have paid that much tax yet to claim a refund on.

Wickham advises working holidaymakers to head to their Revenue account online to lodge a split-year relief claim, complete an end-of-year balancing statement for the previous tax year and update your address to make sure important correspondence can still find you after you move, especially if you are not planning on returning to your previous address here in Ireland.

Again, for those not returning, she cautions against haste in closing down Irish bank accounts. “It can be worthwhile to keep a Sepa bank account open to get a refund easily from Revenue if due,” she says, because “receiving refunds to foreign accounts can be complicated”.

Australian tax

But don’t forget about the Australian side of things. The first thing to remember is that the Australian tax year runs from July 1st to June 30th. Then there are different rules about how tax is handled.

“In Australia, all employees file tax returns annually unlike in Ireland where PAYE workers are not obliged to file an annual tax return,” says Wickham.

The good news is that PAYE workers in Australia can claim for a lot more deductible expenses than they can in Ireland so it pays to get acquainted with them. They include such things as laptops, union fees, work bags, internet access, phones and even dry cleaning in some cases.

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In addition, Australia’s tax band system means you might be paying less tax than back at home because the rate rises on a sliding scale that is less blunt than Ireland’s 20-40 per cent tax rate.

Wickham suggests registering with the Australian Tax Office and getting professional advice in Australia to ensure you are paying the correct amount.

Lastly, make sure you get an Australian tax file number (sort of like a PPSN) before you start work. You can apply for one online via the ATO website.

Understand the ‘super’

Australians have a need to abbreviate everything, even our pensions system. “Super” refers to superannuation. This is an obligation for most employers to pay a percentage of your earnings into an account for your retirement. This is not taken out of your takehome wages.

Generally all employees are entitled to superannuation contributions paid by their employer at a minimum rate of 11 per cent of their ordinary earnings. It could be more, especially for government employers. It is a good idea to pay close attention to job advertisements because most will advertise an annual wage plus the superannuation rate – eg an annual salary of 100,000 Australian dollars a year plus 11 per cent super.

Be wary of job ads offering very high day rates which “include super” because after superannuation and tax is deducted, it’s unlikely that headline figure will look anything close to the amount hitting your bank account.

But what if you plan on leaving Australia for good after the end of your visa?

The good news is you can take your super out. The bad news is that any departing Australia superannuation payment (DASP) is hit with a brutal tax rate of 65 per cent for working holidaymakers.

“Broadly you can keep the superannuation there if you wish to access it at retirement age,” says Wickham. “Ireland will not tax this subject to meeting certain conditions set out in Irish tax legislation.”

Savings buffer

It can take longer than you expect to get settled so bringing a decent amount of savings to tide you over those early weeks can be a good idea, reducing stress and possibly helping you secure accommodation in a competitive market.

When Elaine Stack, a Sydney estate agent, arrived as a young working holidaymaker from Kerry 20 years ago, she paid A$880 (€529) a month for her first Bondi Junction apartment.

Recent arrivals “need to be prepared to be paying between A$400 (€240.50) and A$500 (€300.62) a week in shared accommodation” in similar Sydney hotspots, she says. That’s roughly €1,040 to €1,300 a month for a room.

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While Sydney, particularly the area between Bondi and Maroubra, remains a popular place for Irish immigration thanks to its famous beaches – it’s also one of the most expensive and in-demand areas in the country.

For that reason, Stack suggests people do their research and keep their options open, particularly if their likely job opportunities will involve long commutes. “Don’t be spending an hour on trains and buses and cars to get back to the eastern suburbs. You’re wasting the lifestyle that Sydney has to offer” she says.

While the housing crisis is Australia-wide, it might help to be open to other beachside cities such as Adelaide, Wollongong and Newcastle which offer Instagram-worthy lifestyles at more affordable prices.

PAYE workers in Australia can claim for a lot more deductible expenses than they can in Ireland so it pays to get acquainted with them

Holidaymakers will “probably need, at a minimum, three months’ rent in advance” as well as four weeks’ rent as bond to leave a good impression with estate agents and giving them breathing room while they search for both a job and a place to stay.

“One month is just not enough: you’re jet-lagged for two weeks!” says Stack.

When it comes to securing a rental in a tight market, Stack advises Irish applicants get a copy of their rent ledger from back home (if applicable), written references from previous landlords and lodge savings in an Australian bank account in order to be competitive.

If the applicant doesn’t have significant savings or has yet to find a job, they may run into difficulty renting their own house or flat. However, there is another solution – share housing.

“They can try to get on the lease in their existing accommodation and build up their history. Then they can look at moving on after six months, but try to do that first.”

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Stack also warns arrivals to be wary of sublets unless you have written permission from the real estate company or the landlord.

Jamie Stapleton, a 26 year old HR specialist from Thurles, arrived in Sydney with €5,000 in savings last May but thinks “it would have been a lot more favourable if I had closer to €10,000”.

Stapleton, who has gone viral on TikTok for his honest takes on his experience on his working holiday in Australia, eventually had to offer slightly more than market rate to secure a place in Sydney’s east with his friends.

“We were staying in Airbnbs that were A$70-A$100 a night and you’re just eating though the savings you’ve brought over while you’re trying to find somewhere to stay.”

Another obstacle Stapleton ran into was a condition of working-holiday visas that in most cases restricts holders from working for the same employer for longer than six months. That means those working in professional fields might find employers reluctant to hire and invest in someone they have to terminate in six months.

Stapleton advises reaching out to recruiters who can help secure six-month contracts as well as doing the farm work component of the visa first to save money and to have somewhere to stay while you build funds.

Moving to what is quite literally the opposite side of the world can be stressful but, with a bit of preparation, you should be able to ease a bit of the financial pressure involved in moving Down Under.