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Do you employ staff on a working holiday visa?

The ATO has released new obligations for employers who employ working holiday makers (WHM) from 1st January 2017. Employers may hire a working holiday maker when they need labour for a short period of time and subject to the conditions of their visa. There have also been changes to the tax rates for a working holiday makers depending on their residency status.

A working holiday maker is identified as holding a Working Holiday visa (subclass 417) or Work and Holiday visa (subclass 462).

The additional obligations placed on employers of WHMs are as follows:

Register as a 'WHM Employer' - Employers who engage WHMs must apply for a specific registration with the ATO, in addition to their standard PAYG withholding registrations.

Check the workers have the correct visa - Employers can use the Visa Entitlement Verification Online Service (VEVO) or alternatively, employers can ask prospective employees to send details of their individual visa directly to them via the Visa Entitlement Verification Online email function.

Withhold at the WHM tax rates - Working holiday makers are taxed at 15% from the first dollar earned, regardless of their residency status. Working holiday makers can't 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.

Issue a WHM payment summary - the ATO has indicated that a new payment summary code 'H' will be introduced onto the PAYG payment summary so employers can identify where payments have been made to a WHM. This will ensure they are taxed correctly when lodging their relevant income tax return. In summary any employer can hire a working holiday maker, especially when they need labour for a short period of time.

For further information on employing a WHM please follow this link to the ATO's website.

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