Farmer relief as workers stick around after tax battle
WITH the calendar ticking over to 2017, Bundaberg farmers and tourism operators watched the working holiday tax rate tick over to 15%.
After a painful year of political tug-of-war, it seems they have dodged a bullet.
Craig Van Rooyen, who grows lychees, avocados and macadamias at Bingera, south of Bundaberg, said he was relieved that backpackers had not been put off.
"There are heaps still wanting to work,” Mr Van Rooyen said.
"It's been a good thing because I heard a lot of stories that if it had gone to 32(.5)% a lot of people would cancel.”
He employs 40 workers over an intense six-week period to harvest lychees which end up on shelves in Woolworths, Coles and Aldi as well as in the export market, with a roughly half-half split between locals and holiday workers.
"The hostel I partner with said 'We don't know if we can supply you with your people,'” he said of the "scary” period when the tax rate was being reviewed and debated in parliament, originally introduced as 32.5% by the Federal Government, before the 11th-hour 15% compromise.
Without on-demand backpacker labour, farmers feared fruit in the Bundaberg region would go to waste.
Thankfully, Mr Van Rooyen said, "everyone has turned up.”
What it means
From January 1, employers of working holiday makers in Australia on a 417 or 462 visa must withhold 15% from every dollar earned up to $37,000 with foreign resident tax rates applying from $37,001, according to the Australian Tax Office.
Employers must register with the ATO by January 31 to withhold at the working holiday maker tax rate.
If you already employ working holiday makers you will need to issue two payment summaries (with different rates) this year - one for the period to December 31 last year and a second for any period from January 1 this year.
If you don't register, you will need to withhold at the foreign resident tax rate of 32.5%, and penalties may apply.
To register and view a tax table, head to bit.ly/2hJ3Cbu.