Australian Working Holiday Visa – Changes to tax rate
As you may or may not have heard there has been a huge debate over the amount of tax working holiday makers in Australia should be paying. As of the 1st January 2017 working holiday makers on a 417 or 462 visa will be required to pay 15% on income earned up to $37,000.
So what does an employer have to do if they are looking to employ a working holiday maker?
The employer must already be registered as a Pay As You Go (PAYG) withholding or have a withholding payer number. Once they are registered they will need to go to the ATO website to complete the Working Holiday Maker Employer Registration Form .
Once registered, a withholding rate of 15% applies to the first $37,000 that the working holiday maker earns. Once the working holder maker earns more than $37,000 their withholding rate increases to 32.5%. If you don’t register, you must withhold 32.5% of income earned up to $87,000 with foreign resident withholding rates applying to income over $87,000.