From 1 January 2017 new tax rules apply for working holiday makers on visa subclass 417 (Working Holiday) or 462 (Work and Holiday).
You can check if your employees visa subclass is 417 or 462 using the Visa Entitlement Verification Online service (VEVO).
The Change to Tax is as follows:
The first $37,000 will be taxed at 15%. The usual marginal tax rate will apply for income over $37,000. Employers will now need to register with the Australian Taxation Office as an employer of working holiday makers for the lower tax rate.
Changes to work rights – until recently visitors on the working holiday program were restricted to working for a maximum of 6 months with one employer. However, from 1 January 2017, this will change and a working holiday maker can now stay with the employer for the full 12 months so long as the second 6 months is at a different location.
What you need to do as an Employer:
You must be registered for Pay As You Go Withholding (PAYGW) and have an Australian Business Number (ABN) or a withholding payer number.
Use the registration tool to add working holiday maker withholding to your current PAYGW registration.
Register with the Commissioner:
Employers of working holiday makers are required to register with the ATO as employers of working holiday makers. Registered employers will withhold tax from employees pay at 15% on the first $37,000 of income.
If you are an unregistered employer, you must withhold tax from your working holiday maker employees pay using foreign resident tax rates. Foreign resident tax rates apply a rate of 32.5% to the first $37,000 of income.
Click here for a link to the ATO web page that has the links to the registration tool.
E-Payoffice clients – please refer to the email sent and respond so that we fix all employees accordingly.
