Changes to the ‘backpacker tax’

From 1 January 2017, tax rates will change 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 you?

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

  • 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.
  • You must register with us by 31 January 2017 to withhold at the working holiday maker tax rate.
  • If you already employ working holiday makers you will need to issue two payment summaries (with different rates) this year – one for the period to 31 December 2016 and a second for any period from 1 January 2017.
  • 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.

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