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.
Employers who employ, or plan to employ working holiday makers must register with the ATO by 31st January 2017 so they can withhold the correct amount of tax. Penalties may apply for failing to register.
From 1 January 2017, a 15% withholding rate applies to the first $37,000 of a working holiday maker's income with normal foreign resident withholding rates applying after this amount. If the employer is not registered, then tax must be withheld at the foreign resident tax rate of 32.5% on the entire income.
What do you need to do?
Register with the ATO as an employer of working holiday makers
Use Visa entitlement verification online to check if your worker has a visa that allows them to work in Australia
Withhold the required amount of tax
If you employ, or are thinking of employing working holiday makers, please contact us for further details.