Do you employ working holiday makers?

If you employ staff that are in Australia on a working holiday visa, you need to be aware of the upcoming changes to taxes.

If you hire a Working holiday maker you should be aware that

  • From 1 January 2017, the working holiday maker tax rate of 15% applies from the first dollar earned.
  • They cannot claim the tax-free-threshold regardless of their residency status and must provide a tax file number (TFN), otherwise you need to withhold at the top rate of tax.

Anybody can hire a working holiday maker, especially where there is a need for labour for a short period of time. Working holiday makers hold a visa subclass 417 or 462 that allows them to work while in Australia. You should not employ or pay someone for work if they don’t have permission to work in Australia.

To employ working holiday makers in Australia on a visa subclass 417 or 462, you

  •  must register with ATO to withhold at the working holiday maker tax rate before your first payment to a working holiday maker
  • should check your worker has a visa subclass 417 or 462 using the Visa Entitlement Verification Online service.
  • If you are currently employing working holiday makers, you will not be penalised as long as you register with the ATO before 31 Jan 17.
  • You can still use the new withholding tax rate of 15% from 1 January 2017.You will need to register with the ATO by 31 Jan 2017.Penalties may apply if you fail to register.

Here at Diverse we can assist you with completing the form and getting set up.

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