From 1 January 2017 tax rates are changing for working holiday makers who hold 417 and 462 visas. These rates are known as working holiday maker tax rates.
What you need to do
If you employ a working holiday maker who is in Australia on a 417 or 462 visa, they:
- must register with us to withhold at the working holiday maker tax rate
- can visit border.gov.au/vevo to check a worker has a 417 or 462 visa using the Visa Entitlement Verification Online service
- must withhold tax at 15% on income up to $37,000 and apply foreign resident tax rates on income over $37,000.
What happens next
The working holiday tax rates only apply to income earned from 1 January 2017.
- one for the period to 31 December 2016
- a second for any period to 30 June 2017.
For Employer who employ working holiday makers:
If you employ these working holiday makers, advise them:
- you must register to use the new tax rate by 31 January
- to withhold tax at the new rate from 1 January
- you will 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, they must withhold tax at 32.5% and penalties may apply for failing to register.
If you plan to employ working holiday makers, they must register to withhold at the new tax rate before their first payment to a working holiday maker.
For more information: ato.gov.au/whm
Tax table: https://www.ato.gov.au/Rates/Tax-tables/