On 1 January 2017, tax rates changed for working holiday makers who are in Australia on a 417 or 462 visa. What does this mean for you? If you employ a working...
If you employ backpackers who are in Australia on a 417 or 462 working holiday visa there are some things you’ll need to do following the tax rate changes that started on 1 January 2017.
Hired a working holiday maker before 1 January 2017?
You’ll need to issue two payment summaries for any working holiday maker you employed both before and after 1 January:
– one for income earned up to 31 December 2016
– one for income earned from 1 January 2017 (using gross payments type H).
Hiring or thinking of hiring working holiday makers?
There are three things you’ll need to do:
– Make sure you register with us so you can withhold at the 15% tax rate – you only need to register once, not for every worker you employ.
– Check they have a visa that allows them to work in Australia.
– Withhold 15% from every dollar earned up to $37,000 – foreign resident tax rates apply from $37,001.
If you don’t register, not only will you need to withhold at the foreign resident tax rate of 32.5% from the first dollar your working holiday maker earns, but you might also be penalised.
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