New Tax Rates for Working Holiday Makers

dcd82542-cb91-4c9e-bb87-26f86769528aYou may recall the ‘Backpacker Tax’ being discussed in the news late last year.  Well, these changes came into effect on 1 January 2017 and they impact more than just backpackers.  Known as the ‘Working Holiday Maker Tax Rates’, these new tax rates will affect all employees who hold a 417 and 462 visa.

What You Need to do Next

If you employ a working holiday maker who is in Australia on a 417 or 462 visa, you:
  • Must register with the ATO before 31 January 2017, to withhold tax at the working holiday maker rate
  • Can visit to check if a worker has a 417 or 462 visa using the Visa Entitlement Verification Online service
  • Must withhold tax at 15% on income up to $37,000 and apply foreign resident tax rates on income over $37,000

Click here for the Working Holiday Maker Employer Registration

What Happens Next

The working holiday tax rates only apply to income earned from 1 January 2017.
If you currently employ holiday makers you will need to issue two payment summaries this year:

  • One for the period 31 December 2016
  • A second for any period to 30 June 2017