Changes to the backpacker tax

On 1 January, tax rates changed for working holiday makers who are in Australia on a 417 or 462 visa.

What does this mean for you?

If you currently employ a working holiday maker on a 417 or 462 visa:

  • You must register with the ATO by 31 January so you can withhold the correct amount tax.
  • From 1 January, you should withhold 15 per cent from every dollar earned up to $37,000 with foreign resident tax rates applying from $37,001.

If you employed a working holiday maker before and after 1 January, you need to issue two payment summaries for this financial 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 don’t register, penalties may apply and you’ll need to withhold at the foreign resident tax rate of 32.5 per cent.

Next steps

Go to www.ato.gov.au/Business/Your-workers/Employers-of-working-holiday-makers/ to register with the ATO as an employer of working holiday makers

You can use the Australian Government Department of Immigration and Border Protection’s web page “visa entitlement verification online” (VEVO) to check if your worker has a visa that allows them to work in Australia.

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