Backpacker Tax Reforms passed

Federal Parliament on 1 December 2016 passed the Federal Government’s revised Backpacker Tax Reform Package. The key feature is an income tax rate of 15% from the first dollar earned up to $37,000, with ordinary marginal tax rates applying thereafter for holders of the Working Holiday (417) visa and the Work and Holiday (462) visa.

Employers who wish to utilise the backpacker tax arrangements are required to undertake a once-off registration with the ATO. Employers who do not register will be required to withhold tax at 32.5 per cent from the first dollar earned.

The provisions on the 15% income tax rate and the registration requirement commenced on 2 December, but does not take full effect until next year as it applies to income earned on or after 1 January 2017.

For further information on the registration requirements and other aspects of the Backpacker Tax Reforms, contact the South Australian Wine Industry Association.