If you employ a working holiday maker in Australia on a 417 or 462 visa, they are to be taxed at 15% on earnings up to $45,000.
Employers of working holiday makers are required to register with the Australian Taxation Office (ATO) in order to withhold at the 15% rate.
Employers who do NOT register will be required to withhold tax at 32.5%.
The Working Holiday Maker tax scale works differently to the other tax scales. It calculates tax to be withheld based on a total payments' basis instead of a weekly pay basis.
Irrespective of what an employee is paid, 15% should be withheld as tax if the total of all payments from the employer to the employee made in the financial year of the current pay is less than $45,001.
Once the total of all pays in the financial year is $45,001 and over, the employee moves up to the next tax scale, and 32.5% of the employee's gross pay, no matter the amount, should be withheld as tax.
For more information, please see the Working holiday makers ATO webpage.
What employers need to do and the setups in Attaché:
You must register with the ATO to withhold at the Working Holiday Maker tax rate of 15%.
If you do not register, you will need to withhold using the foreign resident tax table (Tax Code 3 - Foreign Residents).
Once you have registered, in Attaché Payroll, go to Setups, Payroll, Options, Payroll Options, Tax Details tab, and tick the WHM Tax Registered checkbox, then Accept (F9) to save the change.
Note: This is a change as of Attaché Version 23.1. See: STP2 Changes for Working Holiday Makers and Setting up a Seasonal Worker.
Once this is done, go to Payroll, Masterfiles, Employee Details, Maintain.
Enter the Employee Code of your working holiday maker employee.
From the Tax Details tab, select Working Holiday Maker as the Tax Certificate Category. This will then automatically change the Tax Scale to WHM - Working Holiday Maker.
Tip: If as per step 2 the WHM Tax Registered checkbox is unchecked, the tax scale will default to 3 - Foreign Resident and will be taxed at the higher rate
If a working holiday maker does not provide a TFN, the 47% tax rate applies (Tax Code 4N - No Tax File Number - Non-Resident).
Change the Resident status to Non-Resident.
Enter the employees' Home Country.
On the Pay Details page of the Masterfile, the Employment Status should be selected as Casual.
Accept (F9) to save the changes.