If your business employs working holidaymakers – or you’ve been one yourself this year! – you need to know about the “backpacker tax” changes that came into effect from 1 January 2017.

If your business employs working holidaymakers – or you’ve been one yourself this year! – you need to know about the “backpacker tax” changes that came into effect from 1 January 2017.

Employers needs to issue two payment summaries to each working holidaymaker for the 2016–2017 financial year:

  • one for income earned up until 31 December 2016; and
  • one for income earned after 1 January 2017 (using payments code H).

All employers need to include code H on payment summaries of backpacking workers’ post-1 January income, even if the employer isn’t registered with the ATO as employing working holidaymakers.

tip: If only one payment summary is issued, the income needs to be apportioned so the before and after 1 January amounts appear separately on the working holidaymaker’s tax return.