Changes to the ‘backpacker tax’

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 currently employ a working holiday maker on a 417 or 462 visa:

• You must register with us by 31 January 2017 so you can withhold the correct amount tax.
• From 1 January 2017, you should withhold 15% from every dollar earned up to $37,000 with foreign resident tax rates applying from $37,001.
• If you employed a working holiday maker before and after 1 January 2017, you need to issue two payment summaries for this financial year

1. one for income earned up to 31 December 2016 (using code S)
2. one for income earned from 1 January 2017 (using code H).

• If you don’t register, penalties may apply and you’ll need to withhold at the foreign resident tax rate of 32.5%

Next steps:

• Register as an employer of working holiday makers
• Use Visa entitlement verification online External Link 
to check if your worker has a visa that allows them to work in Australia

Find out about:

• Employing legal workers External Link

Tax table for working holiday makers

For Further information please contact Etax Plus on 1300 221 125

Reference:

https://www.ato.gov.au/Newsroom/smallbusiness/Employers/Changes-to-the–backpacker-tax-/?sbnews20170124