When you employ a foreign worker, read about the things that you MUST do in order to avoid not complying with the law and getting heavily penalised.
Register as an employer of working holidaymakers
Once you have registered, all foreign workers that you employ that have a Tax File Number, are subject to a withholding tax rate of 15% from every dollar earned up to $37,000. Every dollar earned over $37,000 is subject to ‘Foreign Resident Tax Rates’ – in accordance with the table published by the Australian Tax Office (32,5% till $87,000 in the 2016/7 year). Working holidaymakers are entitled to superannuation, if they are eligible.
Note: If you do not register, you must withhold at the Foreign Resident Tax Rate (32,5% to $87,000) on every dollar earned AND you might be penalized.
Ensure they have a visa that allows them to work in Australia
Any employer can hire a working holidaymaker, especially when they need labour for a short period of time. You can identify a working holidaymaker as they will hold a Working Holiday visa (subclass 417) or a Work and Holiday visa (subclass 462). The onus is on you to take ‘reasonable steps’ to ensure you do not employ or pay someone for work if they don’t have permission to work in Australia.
The preferred method to check a person’s visa details is by registering on the free online ‘Visa Entitlement Verification Online’ (VEVO). Where an employer receives a VEVO email and there are no work restrictions, they can be confident that the worker is legal. Employers found to have employed, referred or contracted a foreign national who does not have permission to work or is in breach of their visa conditions (an illegal worker) could face penalties of between $3,240 and $108,000 per illegal worker.
If you’d like to hear more about managing your Users, please refer to our website at www.liadaccounting.com.au or you can read the detailed listing of what you are required to do, in the ‘Legal Workers – Guide for Employers’ guide published by the Australian Tax Office.