Do you have backpackers working for you?
As an Employer, you are responsible to make sure the tax you withhold from employees’ wages is at the correct level. For those employers hiring backpackers who are in Australia on a 417 or 462 working holiday visa, you’ll need to follow the tax rate changes that commenced on 1 January 2017.
Employers will need to do the following when hiring working holiday makers:
- Register with the ATO so you can withhold at the 15% tax rate for all holiday makers’ wages. Employers only need to register once.
- Check your working holiday employees have a visa that allows them to work in Australia. You can check the visa status using the Visa Entitlement Verification Online service
- Withhold 15% from every dollar earned up to $37,000 – foreign resident tax rates apply from $37,001.
What happens if you don’t register for the new withholding rules?
Well, not only will you need to withhold at the foreign resident tax rate of 32.5% from the first dollar your working holiday maker earns, but you might also face penalties imposed by the ATO.
What to do:
Employers affected by the above rules should contact Aston Accountants now.
Aston Accountants can get your registration up to date and help you ensure you are withholding at the correct rates.