HIRED A BACKPACKER?

Visa 417 462

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. It’s unusual that they have changed the tax rate during the year rather than start it from the 1st July so you may have to processes two payment summaries (Group Certificates in old language!)

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:

  1. Make sure you register with the ATO  so you can withhold at the 15% tax rate – you only need to register once, not for every worker you employ.
  2. Check they have a visa that allows them to work in Australia.
  3. Withhold 15% from every dollar earned up to $37,000 – foreign resident tax rates apply from $37,001.

If you don’t register with the ATO, 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.

Next steps:

  • To register as an employer of working holiday makers click on this link

https://www.ato.gov.au/twhm/

  • Use this Visa entitlement verification online link to  check if your worker has a visa that allows them to work in Australia.

https://www.border.gov.au/Busi/visas-and-migration/visa-entitlement-verification-online-%28vevo%29

 

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