From 1 January 2017, the working holiday maker tax rate, also known as the backpacker tax, of 15 per cent applied from the first dollar earned to any workers with 417 and 462 visas.
Assistant Commissioner Michael Gleeson said that employers of working holiday makers must register with the ATO and check their worker has the right visa before withholding at the new rate.
“Anyone currently employing someone on a 417 or 462 visa needs to register with the ATO by 31 January 2017 to use the new rate.
“If you aren’t currently employing backpackers but will later in the year, you do not need to register by the deadline. You just need to register when you employ them.
“A registered employer should withhold at a rate of 15 per cent for the first $37,000 paid to a working holiday maker. An unregistered employer still has a withholding obligation but at standard foreign resident rates,” Mr Gleeson said.
Mr Gleeson said that registering allows the ATO to identify employers who can withhold tax at the concessional rate for backpackers.
“Knowing which employers have registered and are doing the right thing ensures we can focus our activities on working with employers of backpackers who are not withholding at the correct rate.”
“It’s quick and straightforward to register – it’s a simple online process and it will take about five minutes.”
“We have already had about 7,350 registrations. We are seeing a steady stream of about 400 employers registering a day.”
“It’s better to register sooner rather than later, so don’t put it off,” Mr Gleeson said.
Mr Gleeson said employers should also check their worker has the right visa. A worker’s visa status can be checked using Visa Entitlement Verification Online (VEVO)External Link service on the Department of Immigration and Border Protection website. Backpackers can also easily access this information and make it available to their employer.
“The ATO is committed to educating employers and visa holders to ensure they meet their obligations under the backpacker tax rules.”
To find up-to-date information for employers and backpackers, visit ato.gov.au and search ‘backpacker tax’ or call Carrick Aland Accountants in Daly, Toowoomba or Chinchilla on 07 4669 9800.