• Peer Wealth

Do you employ working holiday makers? Important changes…

Important changes!

On 2 December 2016, the “Backpacker Tax” changes received Royal Assent.

From 1 January 2017, if you employ people on Subclass 417 (working holiday) or Subclass 462 (Work and Holiday) visas, you need to make immediate changes.

What changes do you need to make?

  1. Register with the Australian Taxation Office (ATO) to be able to withhold tax at the new “Backpacker Tax” rates being 15% on earnings up to $37k and then ordinary marginal rates thereafter (they won’t be entitled to the tax free threshold).

  2. Record this adjustment in the payroll software you use, if you use Xero, instructions can be found here

  3. You must report their earnings on separate payment summaries (for before and after 1 January 2017 earnings).

  4. If you don’t know what Visa your employee is on, you can always register with Visa Entitlement Verification Online (VEVO) to find out.

  5. For working holiday makers, if you worked and earned super, your super will be taxed at 65% when it is paid to you (upon departing Australia).

#Business #TaxAccounting

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