Working Holiday Maker passport country

Some payees who are working in Australia under a 417 or 462 visa, and therefore qualify as Working Holiday Makers (WHMs), may be eligible to be taxed according to Australian tax resident rates instead of WHM rates.

One of the factors that can determine if a WHM is eligible to be taxed at resident rates is whether the WHM’s country has a tax treaty with Australia. Where that is the case, the WHM could be eligible for a tax refund when they complete their tax return at the end of a financial year.

Because the determination of tax residency is a complex matter, the ATO requires employers to tax payees who are working in Australia under a 417 or 462 visa according to WHM rates. However, under STP Phase 2 an employer is required to report the country that issued the passport that a WHM used to enter Australia. That information helps the ATO to determine if the payee qualifies as a tax resident and therefore if the payee is eligible for a tax refund at tax time.

To facilitate this requirement, an enhancement has been made in the FastTrack360 Payroll module to capture the passport country for WHM payees so that this information can be reported to the ATO once STP Phase 2 reporting is available in FastTrack360.

What can you do to prepare?

When creating a new WHM payee record or editing an existing WHM payee record in FastTrack360 v12.10 Patch 3 it is mandatory to select a passport country. However, you may have existing WHM payee records that you have not edited since upgrading to v12.10 Patch 3. It is important that you do so to set the relevant passport country on each existing WHM payee record before STP Phase 2 reporting capability is provided in FastTrack360, which is expected to be in late November/early December 2022.

For more information, refer to the following topic in the v12.10p3 What’s New Guide: Working Holiday Maker Passport Country (AU Only) - FastTrack360 Online Help - Confluence (atlassian.net).