Working holiday makers may face higher taxes starting in July 2016. In addition to checking visas, companies should ensure they understand tax implications.

If your organisation employs people visiting Australia on working holiday visas, you'll need to be aware of some changes which are due to come into effect on July 1, 2016.

The 2015-16 Federal Budget included a proposal to alter the way the tax office treats individuals travelling on working holiday visas, which are also known as 417 visas. The adjustment would ultimately increase the taxes these workers would have to pay on their wages, which means companies should be aware of any payroll changes they'd need to make – in addition to ensuring their staff are aware of the financial implications.

Specifically, the government intends to stop allowing these workers to have access to tax breaks, including the tax-free earnings threshold, the low income tax offset and lower tax rates for smaller incomes. Currently, if people are in the country for at least six months, they typically qualify as tax residents and can enjoy these benefits.

With the new scheme, foreigners on working holiday visas will have to pay taxes of 32.5 per cent for all wages earned in Australia. 

These changes could impact the participation of this workforce in Australian industries. In addition to understanding these adjustments and how they may impact their staff and operations, organisations that hire people on 417 visas should take the opportunity to ensure their processes for checking and monitoring visas uphold legal obligations. 

Not only could a shift in policy increase attention towards working holiday makers, it's always in companies' best interest to make certain their visa validation and monitoring processes are as streamlined as possible. That way, they can be confident they are following the correct procedures and have all of the necessary documentation, whether it's the immigration department or the tax office that comes knocking.

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