New tax arrangements for working holiday makers

By Exhibition and Event Association of Australasia , 7 February, 2017

  1. On 2 December 2016 the Treasury Laws Amendment (Working Holiday Maker Reform) Bill 2016, which requires an employer of working holiday makers to apply to the Commissioner of Taxation to be registered, received assent and came into effect.
  2. Under the Act an employer which is not registered before making a payment to a working holiday maker on or after 1 January 2017 must withhold 32.5% tax from the employee’s first $37,000 (or, if the working holiday maker has not quoted a TFN, nor advised they have applied for a TFN, the employer must withhold at the top marginal rate – 47%).
  3. As a transitional measure employers have until 31 January 2017 to register and registration before this date will apply from 1 January.
  4. If registered, and provided the employee has given his or her TFN, the employer should withhold 15% of the first $37,000 paid to the employee. For registered employers of working holiday makers the progressive scale for working holiday makers who have supplied a TFN is
    Taxable Income Paid By Employer Tax Rate
    $0 – $37,000 15%
    $37,001-$87,000 32.5%
    $87,001-$180,000 37%
    $180,001 and above 47%
  5. As well as the different withholding amount required if the employer is not registered, being an unregistered employer of working holiday makers after 31 January 2017, can itself attract penalties. A link to the on-line registration form can be found here and further information from the ATO website can be found here.
  6. A working holiday maker is someone whose eligibility for employment is provided by a subclass 417 (Working Holiday) or 462 (Work and Holiday) visa, or under a bridging visa granted to someone who has applied for a sc 417 or 462 visa.



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Source: Australian Chamber of Commerce and Industry