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Impacted employees must be updated in ICS Payroll BEFORE running your PAYG Summaries for Tax year ending 30/6/2017Please Note: Changes to this functionality apply from 25/6/2018. We have automated this functionality so all you need to do is select the correct "Resident Status" on the Tax Info Tab of the employee record. After you have selected the resident status "Working Holiday Maker" the system will automate and update the employee tax scale as needed and also if the employee changes earnings threshold. |
What you need to do
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Please read the following links to understand your obligations as an Employer |
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Once you've registered with the ATO - you will need to setup any Holiday Makers accordingly in ICS Payroll. See steps below.
How to register with the ATO
Only employers of working holiday makers need to register by using the registration tool.
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How to tax a working holiday maker
Once you register, you withhold 15% from every dollar earned up to $37,000 with foreign resident withholding rates applying to income over $37,000.
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Working holiday makers can't claim the tax-free threshold and must provide you with their tax file number (TFN).
Setting up Employees as Working Holiday Makers
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| title | Bulk Updates |
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Use the following steps to update employees who were are eligible Working holiday Makers from 1/1/2017
- Navigate to the Employee record in Edit mode
- Go to the Tax Info tab
- Ensure you have entered a valid Tax File Number (TFN) and set the Resident Status field to Non-ResidentFrom the Income Type field select the correct Working Holiday Maker option (e.g. H - Working Holiday Maker < $37,000)
- The Employee Tax Scale field should update automatically
- In the rare situation where you have a resident WHM, you will need to manually select the Employee Tax Scale please ensure you always set the Income type field.
Non-residents - set Income Type field - This should automatically set the Income type and Employee Tax scale.
- Click Save
In future a daily update will run that will update the tax scale should the employee change their earnings threshold.
Set the Residents - set Income Type & Employee Tax Scale fields 
PAYG summaries
To make sure working holiday makers are taxed correctly, a payment summary must identify income earned by a working holiday maker from 1 January 2017.
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- 1 July to 31 December 2016
- 1 January to 30 June 2017.
ICS Payroll Generated
ICS Payroll supports creating both PAYG Summaries - including the correct 'H' Income Type - provided you've setup your employees correctly. Follow the steps above to setup your Working Holiday Makers correctly (prior to the EOY).
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See the /wiki/spaces/SUP/pages/32767971 for detailed instructions.
Manual (paper) process
For payments to a working holiday maker, you need to indicate 'H' on the payment summary in the 'gross payment type' box. If your payment summary doesn't have this box, then just put the letter 'H' next to the income earned by the working holiday maker. This is to help your worker to prepare their income tax return.