Good news for working holiday makers and backpackers this week as the government confirmed that the controversial 32.5% "back packer tax" which was announced as part of 2015/16 budget will not be implemented.
The new proposal will impose a 19% tax rate on earnings up to $37,000 and the ordinary marginal tax rate will apply for any earnings above this amount.
The government will also introduce measures to prevent the exploitation of working holiday makers by requiring employers to complete a one-off registration with the ATO. This registration will provide valuable insight and data on the employment of working holiday makers. Employers that don't register will be required to withhold tax from earnings at the 32.5% rate.
A list of registered employers will be made available through through the ABN lookup.
From 1 January 2017 the visa application fee will be reduced by $50 to $390.
The working holiday scheme allows young people aged 18-30 who hold a passport from eligible countries to enter Australia for up to 12 months and work with an employer for up to 6 months.
Eligible passport holders can apply for a further 12 month visa if they complete at least 3 months of specified work in regional areas of Australia. From 16 September 2016 two new postcodes have been added to the list of specified regional areas and include 6076 and 6111 in Perth Hills, WA.
The specified work remains unchanged and includes the following: