If you have 417 (Working Holiday) or 462 (Work and Holiday) workers it is important for you to note some changes to tax arrangements for these employees.

Tax Rate Changes:
From 1 January 2017 working holiday makers will incur a 15 per cent income tax rate for amounts up to $37,000, with ordinary tax rates applying for taxable income exceeding this amount (see table below).

Taxable Income Tax Rate Value (a)
$0-$37,000 15% on each $1 up to $37,000 0.15
$37,001 – $87,000 32.5% on each $1 over $37,000 to $87,000 0.325
$87,001 – $180,000 37% on each $1 over $87,000 to $180,000 0.37
$180,001 and over 47%* on each $1 over $180,000 0.47

*Includes the Temporary Budget Repair Levy of 2%

Changes to Work Rights:
Visitors on the working holiday program are now eligible, from 1 January 2017, to stay with their employer for 12 months, instead of the maximum 6 months with one employer. They will, however, need to complete their second 6 months in a different location.

Employers’ of working holiday makers will also need to register with the Australian Taxation Office (ATO) to be able to withhold tax at the 15 per cent rate. Unregistered employers will need to withhold at 32.5 per cent and may be subject to ATO penalties. The register will also be made public so working holiday makers can check whether a prospective employer is registered.

A separate payment summary will need to be supplied for any income earned from 1 July 2016 – 31 December 2016 for any working holiday maker who worked before 1 January 2016.

Workplace Central will advise of further updates and details such as what will be required when filling out TFN Declaration document when available.

For more information please find the Fact Sheet link below:

With thanks to Etaps for providing the latest information on the amendments.