The ATO said “The tax rates for working holiday makers on a 417 or 462 visa changed on 1 January 2017. They now pay 15% tax on all income up to $37,000 after which foreign resident tax rates apply.
“If your clients employ these working holiday makers, advise them:
• they must register to use the new tax rate by 31 January
• to withhold tax at the new rate from 1 January
• they will need to issue two payment summaries for this financial year
- one for income earned up to 31 December 2016 (using code S)
- one for income earned from 1 January 2017 (using code H).
“If they don't register, they must withhold tax at 32.5% and penalties may apply for failing to register.
“If your clients plan to employ working holiday makers, they must register to withhold at the new tax rate before their first payment to a working holiday maker.”
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