According to ATO from 1st January 2017, new tax rates commenced for people in Australian on working holiday visas (417 or 432 visa). Two different tax rates will apply to income earned by working holiday makers during 2017 income year.
Ordinary marginal tax rates apply to income earned between 1 July 2016 and 31 December 2016. In the majority of cases the non-resident tax rate of 32.5 per cent will apply.
A rate of 15 per cent will apply to income earned from 1 January 2017 onwards on the first dollar of income earned up to $37,000. Ordinary marginal tax rates apply from $37,001.
Any employer can hire a working holiday maker, especially when they need labour for a short period of time. You can identify a working holiday maker as they will hold a Working Holiday visa (subclass 417) or Work and Holiday visa (subclass 462).
Working holiday makers are taxed at 15% from the first dollar earned, regardless of their residency status. Working holiday makers can’t claim the tax-free threshold and must provide you with their tax file number (TFN). If they don’t, you need to withhold tax at the top rate.
Working holiday makers are entitled to super.
To make sure working holiday makers are taxed correctly, a payment summary must identify income earned by a working holiday maker from 1 January 2017.
Working holiday makers who worked for you both before and after 1 January 2017 will need two payment summaries as these periods are taxed differently. The two payment summaries cover the following periods:
1 July to 31 December 2016
1 January to 30 June 2017.
Employer required to register for PAYG withholding or a withholding payer number to ATO.
For further assistance, please contact Taxplanners on 1300 000 TAX (1300 000 829), 03 9600 0143 (10 Lines).
You can also visit our office for assistance –
Melbourne CBD – Suite 411-413, Level 4, 343 Little Collins Street, Melbourne
Werribee Office – 88 Watton Street, Werribee, Contact – 03 901 MY TAX (03 9016 9829)