Any employer can hire a working holiday maker, which really helps when labour is needed for a short period of time, however, you must register as an employer before you can add them to your payroll.
Agriculture, hospitality, construction and domestic services often use working holiday makers, or backpackers, to meet this demand.
Who are entitled to be working holiday makers?
Working holiday makers hold a visa subclass 417 or 462 that allows them to work while in Australia. You should not employ or pay someone for work if they don’t have permission to work in Australia.
To be eligible, an employer must declare that they:
- Operate a business and have a genuine business requirement to employ one or more working holiday makers. (It is important to note that the requirement does not apply to an employer who is not carrying on a business, for example, employing domestic workers such as household staff)
- Agrees to comply with the Fair Work Act 2009 in relation to its employment of working holiday makers
- Agree to check that any such individual they employ holds a visa that causes that person to be a working holiday maker. More specifically, holds either a 417 or 462 visa.
How to register
To employ a working holiday maker in Australia on a visa subclass 417 or 462, you:
- Should check your worker has the correct visa using the Visa Entitlement
- Must register with the Australian Taxation Office or through your registered tax agent or BAS agent
- Provide your ABN/Withholding Payer Number
- Be registered for Pay As You Go Withholding (PAYGW)
Note: Penalties may apply if you fail to register.
Working holiday makers tax rate
The working holiday makers’ tax rate of 15% applies from the first dollar earned. They cannot claim the tax-free-threshold regardless of their residency status and must provide a tax file number (TFN), otherwise you need to withhold at the top rate of tax.
If you don’t register, you must use the foreign resident withholding tax rates which start at 32.5% for the first $37,000. If eligible, working holiday makers remain entitled to superannuation.
If you would like some more information, please do not hesitate to get in touch for your free assessment. Contact us here.