Employees on Subclass 417 Working Holiday Visas and Subclass 462 Work and Holiday Visas are often hired by employers seeking to fill a short term labour need.
As a helpful reminder, employers should consider the following requirements before taking on a working holiday maker.
Employers must register with the ATO to withhold tax at the working holiday maker rate before making the first payment to them. It is important to note that penalties may apply to businesses failing to comply with this requirement.
If your business has an ABN, you can register online here.
Workers must apply for a tax file number and will be charged at a rate of 15 per cent with no low income threshold for the first $37,000 earned. After $37,000, foreign resident tax rates apply. For workers who do not have a tax file number, they will be taxed at the highest rate of 32.5 per cent up to $90,000 and then at the foreign resident tax rates.
Working holiday makers are entitled to superannuation under the same rules as Australian employees. If the position is one that ordinarily provides superannuation, the visa holder must receive this payment.
The ATO has provided an Employee/contractor decision tool to assist you if you are uncertain if your worker is an employee or contractor for tax and super purposes.
Entitlement to work
Employers should take care to ensure they are employing someone with the right to work by requesting copy of their prospective employee’s passports and reviewing their visa details on the Department’s Visa Entitlement Verification Online website.
Working holiday makers can only work for an employer for up to six months and employers should take note of the commencement date and be aware of when the six month limitation ends.
Penalties for employing workers illegally include warnings, infringement notices, civil penalty orders, criminal proceedings for repeat offences and aggravated criminal proceedings for the exploitation of employees.
For employers who do not report using Single Touch Payroll, you are required to give a payment summary to every working holiday maker.
Employment records for second year visas
A working holiday maker may be eligible for a second year visa if they complete three months (88 days) of specified work in regional Australia. This is typically in the agriculture, mining, fishing, and construction industries.
In addition to the above, employers hiring working holiday makers should ensure those employees receive payslips for each pay period.
Authors: Rebecca Macmillan & Kathryn Cramp
Rachel Drew, Partner
T: +61 7 3135 0617
Rebecca Macmillan, Registered Migration Agent
T: +61 7 4230 0412
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