As of 5th October 2017, there were changes to the Tax File Number (TFN) Declaration form. In the payee area (Section A) there is now a tick box for working holiday makers at Question 7.
This tax rate category is known more colloquially as the ‘backpacker tax’. It applies to workers aged between 18 and 30 who fall under visa subclass 417 or 462. They are taxed at 15% for the first $37,000 of their income, after this amount the usual marginal tax rates apply ie. the tax free threshold cannot be claimed.
Employers of working holiday makers will need to register with the ATO – click here to go to the ATO registration tool. Without registering, the backpacker tax (15%) cannot be applied. Employees will then need to be taxed at foreign resident rates (32.5%).
Only income earned from January 1 is eligible to be taxed at the working holiday maker rates. This amount will appear on the Payment Summary under Gross Payments Type ‘H’.
You can now fill in the form on your screen by downloading the file, saving it to your computer and accessing it as needed. If you are an E-Payoffice client, we electronically remit these details for you but you are still required to keep a signed copy on hand in case of audit.
