Things have changed for working holiday makers. From 1 January 2017 they now pay 15% tax on all income up to $37,000 after which foreign resident tax rates apply.
This means that things have changed for the employers of working holiday makers.
Where you have existing employees prior to 31 December and who are continuing employment:
- The employer must register to use the new tax rate by 31 January
- If not registered, the employer must withhold tax at 32.5% and penalties may apply for failing to register
- Once registered, must withhold tax at the new rate from 1 January
- Two PAYG Payment Summaries will be required to be lodged in the 2016-2017 year
- One for income earned up to 31 December 2016 (using code S)
- One for income earned from 1 January 2017 (using code H)
If you are considering hiring a new working holiday maker, the employer must register to withhold at the new tax rate before the first payment to a working holiday maker
Link to ATO information, including registration and withholding rates can be found at:
Contact Carrick Aland in Dalby, Toowoomba or Chinchilla on 07 4669 9800 for more information