• Employers of working holiday makers

    Any employer can hire a working holiday maker, especially where they need labour for a short period of time. Agriculture, hospitality, construction and domestic services often use working holiday makers or backpackers to meet this demand.

    Working holiday makers hold a Working Holiday visa (subclass 417) or Work and Holiday visa (subclass 462) that allows them to work while in Australia. You should not employ or pay someone for work if they don’t have permission to work in Australia.

    From 1 January 2017, the working holiday maker tax rate of 15% applies from the first dollar earned. Regardless of their residency status, working holiday makers cannot claim the tax-free-threshold and must provide you with their tax file number (TFN). If they don't, you need to withhold tax at the top rate (see Individual income tax rates).

    Working holiday makers remain entitled to superannuation if they are eligible.

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    What you need to do

    To employ working holiday makers in Australia on a visa subclass 417 or visa subclass 462, you:

    Penalties may apply if you fail to register.

    How to register

    Registering as an employer of working holiday makers is quick and easy using the registration tool.

    Only employers of working holiday makers need to register.

    Working holiday maker employer registration tool

    You should print a copy of the registration confirmation screen for your records. You must register before making your first payment to the working holiday maker.

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    How to tax a working holiday maker

    The 15% tax rate only applies to salary and wages paid from 1 January 2017. You must register to withhold at this rate.

    If you don't register, you must use the foreign resident withholding rates which start at 32.5% for the first $37,000.

    Penalties apply if you employ a working holiday maker with visa subclass 417 or 462 and you don't register as an employer of working holiday makers.

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    Payment summaries

    To make sure that working holiday makers are taxed correctly, a payment summary must identify income earned by a working holiday maker from 1 January 2017.

    From March 2017, payment summaries will be updated to include a box for you to indicate the type of payment you've made. For payments to working holiday makers, you need to indicate 'H'. If your payment summary doesn't have this box, then just put the letter 'H' next to the income earned by the working holiday makers. This is to help your worker when they prepare their tax return.

    Working holiday makers who worked for you both before and after 1 January 2017 will need two payment summaries because these periods are taxed differently. The two payment summaries are to cover the following periods:

    • 1 July to 31 December, and
    • 1 January to 30 June.

    If your software is unable to produce two records for a single employee, you will need to restart your worker as a working holiday maker as at 1 January. If you cannot produce electronic records, then ATO paper forms can be completed. Talk to your software provider about your options if you're not sure.

    If your software will produce two records for a single employee later in the year, you can delay your payment summaries until that time.

    Make sure the employment dates are accurate.

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    Last modified: 09 Feb 2017QC 50741