The ATO has announced that employer registration for working holiday makers has been extended to Tuesday 31 January. Working holiday makers are those with visa sub-classes 417 and 462.
Employers of working holiday makers must register with the ATO. Once registered, a withholding rate of 15 per cent applies to the first $37,000 of a working holiday maker’s income.
Employers that do not register must withhold tax at 32.5 per cent for the first $37,000 of a working holiday maker’s income. From $37,001, normal foreign resident withholding rates apply. Penalties may apply for failing to register.
The ATO says that employers of working holiday makers will not be penalised as long as they register by Tuesday 31 January, but they can still use the new withholding tax rate of 15 per cent from 1 January 2017.