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 for these periods:

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

For AccountRight to issue two payment summaries for a working holiday maker, you'll need to terminate their current employee card and create a new employee card.

Here's how to do it:

1. Enter a Termination Date in the working holiday maker's current employee card.
   1. Go to Card File > Cards List > Employee tab > click the zoom arrow to open their card.
   2. Click the Payroll Details tab.
   3. In the Termination Date field, enter 31/12/2016. You can use the Card ID field on the Profile tab to enter something to identify this as the terminated employee card, e.g. OLD.
   4. Click OK.
   5. Click Yes to the confirmation message.
2. Create a new employee card for the working holiday maker.
   1. Go to Card File > Cards List > Employee tab > click New.
   2. Enter the same employee details from their original card. You can use the Card ID field on the Profile tab to enter something to identify this as a reinstated employee card, e.g. NEW.
   3. On the Payroll Details tab, enter a Start Date of 01/01/2017.
   4. Click Taxes and set a 15% withholding variation rate as described in the next task.
   5. Click OK. You can now use this card when paying the employee from 1 January 2017.

When you run the Payment Summary Assistant two payment summaries will be generated for the working holiday maker. To confirm the amounts on the payment summaries, run the Payroll Activity Summary report (Reports menu > Index to Reports > Payroll tab). If needed, you can change values when reviewing the payment summaries.

1. Go to the Card File command centre and click Cards List.
2. Click the Employee tab.
3. Click the zoom arrow to open the employee's card. If you've created a new employee card (as described above) open this card.
4. Click the Payroll Details tab then click Taxes.
5. In the Tax Table field, select Withholding Variation.
6. In the Withholding Variation Rate field, enter 15%.
    
7. Click OK.

 Repeat these steps for each working holiday maker you employ.

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.

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 card as described above to allow AccountRight to generate two payment summaries for working holiday makers. One payment summary will be for the period 1 July 2016 - 31 December, and the second payment summary will be for 1 January - 30 June 2017.