A number of growers have contacted us this month about requirements for administering the new 15 per cent backpacker tax. Last week, Growcom attended a teleconference held by the Australian Tax Office to discuss the details.
Registered growers who employ a working holiday maker in Australia on a 417, 462 or bridging visa must now withhold 15 per cent from every dollar earned at the farm workplace up to $37,000. Beyond that figure, the foreign resident tax rate applies.
Employers who currently have working holiday makers on their books must register online with the ATO (www.ato.gov.au/twhm/) by the January 31 deadline to be able to withhold at the working holiday maker tax rate. However, those growers who won’t have working holiday workers until later in the year can register their business then.
When you register you won’t currently receive an acknowledgement, however the ATO will eventually include this information on your ATO profile. In the meantime you can phone the ATO to confirm your registration, if necessary. Or you can take a screenshot of the transaction.
Those growers who cannot register via the online registration form due to connectivity issues, can register with the ATO by telephone on 13 28 66.
When new employees apply for a TFN they will receive a note from the ATO that they are a working holiday maker, where applicable, and will be advised to inform their employer.
The PAYG summary form issued to employees will eventually display an Indicator H to show that the employee is a working holiday maker.
Those growers who are currently employing working holiday makers will need to issue two payment summaries (with different rates) this year – one for the period July 1 to 31 December 31, 2016 and a second for any period from January 1 to June 30, 2017.
To do this, growers may need to ‘terminate’ their workforce on their payroll system and reinstate them under a new record. It may be that with some payroll software the new tax rate will have to be applied as a manual override of the default tax rate.
This may also cause issues for the annual summary provided to the ATO. Please contact your payroll software provider for more advice.
The ATO has recognised that two different tax rates in one year have created more work.
Growers with more questions should attend Growcom’s Workplace Essentials Seminars 2016/17. Half-day seminars are being run at a range of locations throughout Queensland in February and March. For more information about a seminar near you, visit: www.growcom.com.au/events/
