AccountRight Plus, Premier and Enterprise, Australia only
From 1 January 2017, a new tax was introduced for working holiday makers who are in Australia on a 417 or 462 visa. This is sometimes referred to as the 'backpacker tax'.
Here's Oi Yee, one of our AccountRight experts, explaining the ins and outs of this new tax.
To assign the new tax tables to working holiday makers:
- Load the tax tables: After installing AccountRight v19.15 or later, go to the Setup menu and choose Load Tax Tables.
- Assign the new tax tables: In the working holiday maker’s card, select the Working Holiday Maker tax table, or if no tax file number has been provided by the employee, select No Tax File Number Working Holiday Maker.
Assigning one of these new tax tables ensures:
- the correct tax is withheld from the employee’s pay, and
- the Gross Wages field on their payment summary will show the H income code.
If you don't register for the working holiday maker tax, you'll need to use the applicable Foreign Resident tax table for working holiday makers. If you're not sure which tax table to use, check with the ATO.
If you withhold 15% for working holiday makers without registering, you may be penalised by the ATO.
You must withhold 47% from payments to working holiday makers if:
- They have not provided you with their tax file number (TFN),
- have not claimed an exemption from quoting their TFN, or
- have not advised that they have applied for a TFN.