News
By Annabel Hutch , Growcom
Changes to the backpacker tax
From 1 January 2017 , tax rates have changed for working holiday-makers who are in Australia on a 417 or 462 visa . These rates are known as “ Working holiday-maker tax rates ”.
What does this mean for employers ?
If you employ a working holiday-maker in Australia on a 417 or 462 visa :
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From 1 January 2017 , you should withhold 15 % from every dollar earned up to $ 37,000 with foreign resident tax rates applying from $ 37,001 . Please see the following link to the new tax tables : https :// www . ato . gov . au / Rates / Schedule-15--Tax-table-for-workingholiday-makers /
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You must register with the ATO by 31 January 2017 to withhold at the working holiday-maker tax rate . Please see the following links to more information and the registration page : https :// www . ato . gov . au / business / registration / work-out-which-registrations-you-need / taxation-registrations / employer-registration--workingholiday-makers /
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See also https :// www . ato . gov . au / twhm / If you can ’ t register via the online registration form , you can register with the ATO over the phone on 13 28 66 . Ensure that you have your ABN readily accessible for this process .
If you don ’ t register , you will need to withhold at the foreign resident tax rate of 32.5 % Penalties may apply if you employ holiday makers but don ' t register .
If you already employ working holiday-makers you will need to issue two payment summaries ( with different rates )
this year – one for the period 1 July 2016 to 31 December 2016 and a second for any period from 1 January 2017 to 30 June 2017 .
There are two distinct time periods which need to be accounted for , therefore there will be two separate payment summaries . Most payroll systems only allow you to produce one payment summary per person per year . If this is the case for the payroll system that you use , a solution may be to terminate your continuing employees on 31 December 2016 and re-employ them on 1 January 2017 under the new tax rate to allow you to produce these two payment summaries .
However , this might not be the case for your payroll system . It is highly recommended that you contact your payroll service provider about this issue to ensure that you are setting this up correctly .
Your employees who were employed before 1 January 2017 , do not need to submit a new TFN declaration for the new period , and the new tax scales will automatically apply . There is no new TFN declaration form , although the residency rules have changed , so no working holidaymaker will be residents for tax purposes .
If you have any queries or comments about this information , please don ’ t hesitate to contact Growcom Workplace Relations Team on 07 3620 3844 or email wrteam @ growcom . com . au
summerfruit . com . au December 2016 | Australian Stonefruit Grower 23