MYOB AccountRight
Page tree

Versions Compared

Old Version 1

changes.mady.by.user ErikV

Saved on

compared with

New Version 2

changes.mady.by.user ErikV

Saved on

Key

  • This line was added.
  • This line was removed.
  • Formatting was changed.
HTML Wrap
classsection group
HTML
<span data-swiftype-index="true">

Setting up a new employee profile

If you paid working holiday makers in 2016 who will be paid with the new tax rate in 2017, you need to issue two payment summaries:

  • July 1 - December 31 2016
  • January 1 - June 30 2017
For MYOB

 If you’ve registered with the ATO to employ working holiday makers, Essentials has a new tax table you can assign to these workers - Working holiday maker (visa subclasses 417 or 462). Learn about how to manage your employees' tax details.

Image Added

Assigning this new tax table 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’ve registered with the ATO and have been correctly taxing your working holiday makers using a withholding variation, you can uncheck the Approved withholding variation box after you assign the Working holiday maker (visa subclasses 417 or 462) tax table. This will ensure your working holiday maker is correctly taxed in future pay runs.

What if a working holiday maker started work prior to 1 January 2017?

If you employed a working holiday maker before and after 1 January 2017, the ATO requires you to issue them two payment summaries for this financial year.

  • One payment summary will cover the period 01/07/2016 - 31/12/2016, and the Gross Wages field will show the S income code beside it.
  • The other payment summary will cover the period 1/01/2017-30/06/2017, and the Gross Wages field will show the H income code.

For Essentials to issue two payment summaries for a working holiday maker,

you

they'll need

to set a Finish date on their current employee profile and create a new employee profile for the working holiday maker.

Here's how to do it:

  • Enter a Finish date in the working holiday maker's employee details.
  • Go to Payroll > Employees and click on the working holiday maker's name to open their Employee details.
    • In the Finish date field, enter

    two employee profiles.

    • One employee profile will be for the period 1/07/2016-31/12/2016.
  • You can use the Notes tab to enter something to identify this as the 2016 employee profile.
  • Click Save.
  • Add your working holiday maker as a new employee.
    1. Go to Payroll > Employees and click the Add Employee button.
    2. Enter the same employee details from the original profile. On the Employee details tab, enter a Start date of 01/01/2017.
    3. You can use the Notes tab to enter something to identify this as the 2017 employee profile.
    4. Go to the Tax tab, and set a 15% Approved withholding variation as described in the next task, Setting a withholding variation.
    5. Click Save. You can now use this employee profile when paying the employee from their first pay in 2017.

    • When you produce PAYG payment summaries at the end of the financial year, two summaries will be created for the working holiday maker.

    Setting a withholding variation

    1. Go to the Employees screen (Payroll > Employees) and click the name of a working holiday maker.
    2. Go to the Tax tab.
    3. Check the box for Approved withholding variation, and enter the correct withholding rate (i.e., 15% for working holiday makers earning $0-37,000). Image Removed
    4. Click Save.

     Repeat these steps for each working holiday maker you employ. When you're finished, you're ready to do a payrun.

    Important: You should manually track your working holiday makers' gross earnings to confirm their correct tax rates. You can do this by checking their pay history.
    • This profile requires the applicable tax table based on the employee’s Tax File Number declaration.
    • The other employee profile will be for 1 January 2017 onwards. This profile requires the table Working Holiday Maker (visa subclasses 417 or 462) assigned.

    With those two employee profiles set up, you can use Essentials to prepare your payment summaries.

    HTML Wrap
    classcol span_3_of_5

    Australia only

     

    From 1 January 2017, tax rates changed for working holiday makers who makers (WHM) who are in Australia on a 417 or 462 visa (. This is sometimes referred to as the 'backpacker tax').

    Under this new tax scale, you should withhold 15% from every dollar earned by a working holiday maker up to $37,000 with foreign resident tax rates applying from $37,001. See the ATO for more details.

    You should start withholding at these rates from the first pay run after 1 January 2017.

    UI Text Box
    typenote

    Registering with the ATO

    If you currently employ, or are likely to employ working holiday makers, you must register by 31 January 2017 to avoid penalties. Register from the ATO website

    How to withhold the working holiday maker tax

    You can use the Approved withholding variation function in MYOB Essentials to withhold the correct percentage.

    Already paid working holiday makers in 2016? If you're already paid a working holiday maker in 2016 and will continue paying them in 2017, you'll need to add them as a new employee in 2017 to ensure two payment summaries are accurately produced.

    UI Expand
    titleSetting up a new employee profile
    UI Expand
    titleSetting a withholding variation
    UI Text Box
    typenote
    UI Text Box

    You might need expert help

    If you've paid working holiday makers from 1 January 2017 and any of the following apply to you, you'll need to speak to your accounting or tax advisor about the implications for your business.

    • You weren't aware of the new working holiday maker tax.
    • You paid a working holiday maker between July-December 2016 and you haven't set up a second employee profile for them.
    • You're not sure if you've withheld the right amount of tax from working holiday makers. 
    HTML
    <h2><i class="fa fa-comments"></i>&nbsp;&nbsp;FAQs</h2><br>
    UI Expand
    titleWhat happens if I don't register for the working holiday maker tax?

    What happens if I don't register for the working holiday maker tax?

     

    If you don't register for the as an employer of working holiday maker taxmakers, you must withhold the foreign resident tax rate of 32.5% 'll need to use the applicable Foreign Resident tax table for working holiday makers.  Follow the steps in Setting a withholding variation to set this rateIf 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.

    Learn about registering with the ATO

    UI Expand
    titleWhat if a working holiday maker hasn't provided their tax file number (TFN)?

    What if a working holiday maker hasn't provided their tax file number (TFN)?

    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.
    UI Expand
    titleWhy do I need to issue two payment summaries for working holiday makers paid in 2016?

    Why do I need to issue two payment summaries for working holiday makers paid in 2016?

    Working holiday makers who earned income between 1 July and 31 December 2016 and continue earning income up to 30 June 2017 will require two payment summaries. This is an ATO requirement because the tax change introduces two separate rates of taxation within the same financial year.

    You can set up a new employee profile as described above to allow Essentials to generate two payment summaries for working holiday makers. One payment summary will be for the period 1 July - 31 December 2016, and the second payment summary will be for 1 January - 30 June 2017.

    HTML
    </span>
    HTML Wrap
    width15%
    classcol span_1_of_5
     
    HTML Wrap
    floatleft
    classcol span_1_of_5
    Panelbox
    namemagenta
    titleRelated topics
    HTML Wrap
    classsidebarlinks

    Pay history

    Set up employees

    Enter tax details

    Do a pay run

    Panelbox
    nameyellow
    titleFrom the community

    RSS Feed
    titleBarfalse
    max5
    showTitlesOnlytrue
    urlhttp://community.myob.com/myob/rss/search?q=get+started&filter=labels%2Clocation&location=forum-board%3AEssentialsAccounting&search_type=thread

    HTML Wrap
    classmorelinks
    More »

     

     

     

     

     

    help
    Small Business
    AccountRight
    AccountRight 2017
    Australia
    New Zealand

    Was this information helpful?

    Yes
    No

    Why not?



    That's no good. Try searching the help. Or maybe the community forum can help answer your question.

    Sorry to hear that. See if our community forum can help. Got a feature idea? Add it to the ideas exchange.

    How would you improve this topic?

    Unfortunately, we won't be able to respond to your feedback. Please don’t enter any personal information—if you need urgent help, contact our support team instead.

    Thanks for your feedback.

    Thanks! Anything you'd like to add?

    We’d love to know what worked so we can keep improving our help. Please don’t enter any personal information—if you need more help, get in touch with our support team.

     

     

    Looking for someone to help you? Get in touch with an MYOB advisor for specialist help with your business Find an advisor

      Get started

      Company file

     

      Work with others

     

      Banking

     

      Emails & printing

     

      Items

      Employees (AU)

     

      Suppliers

     

      Customers

     

      Reporting

     

      EOFY

     

      Tips & tricks

     

    Copyright © 2023 MYOB Technology Pty Ltd. All rights reserved