FastTrack360 Version 12 Online Help

Working Holiday Makers - Lump Sum & Termination Payments (AU Only)

Owned by Fiona Sims
Last updated: 06 February 2022
3 min read

Description

The ATO previously stipulated the following in relation to payments made to Working Holiday Makers (WHMs):

  • any amount that is paid to a WHM that is not salary and wages must be taxed at the WHM tax rate and must be reported as part of gross earnings

  • any taxable allowances paid to a WHM must be reported as part of gross earnings.

In accordance with those requirements, the following changes were introduced in FastTrack360 Version 11.36p3 onwards:

  • the ability to make lump sum and termination payments at the Termination pay batch stage was disabled for WHMs

  • all taxable allowances paid to a WMH were reported as gross earnings via Single Touch Payroll (STP).

The ATO have again revised the interpretation of the WHMs legislation and have indicated that:

  • WHMs are eligible to receive lump sum payments and termination payments

  • the tax treatment and the STP reporting requirements for allowances paid to WHMs are to follow the same rules as for regular Individual Non Business payees.

Therefore, the following changes have now been implemented to facilitate this change in the interpretation of the legislation:

  • the ability to make Lump Sum A, Lump Sum B, Lump Sum D and ETP payments at the Termination stage of a pay batch has been re-enabled for payees who are categorised as WHMs

  • taxable allowances paid to WHMs are once again reported via STP in accordance to the configuration on the allowance pay code (for more information, see Configuration below).

Benefits

This enhancement provides compliance with revised ATO requirements relating to the types of payments that can be made to WHMs.

Configuration

Be aware that if you use the same allowance pay codes to pay allowances to WHMs and regular Individual Non Business Payees, the system will reference the following options on an allowance pay code, as configured in Agency Portal > Rates and Rules > Maintenance > Pay Code, to determine how an allowance will be reported through STP when paid to a WHM:

  • Include in Gross Earnings on Individual Non Business Payment Summary – if ticked, the allowance will be reported as part of the gross earnings amount that is reported through STP

  • Show on Individual Non Business Payment Summary – if ticked, the allowance will be itemised separately from gross earnings when it is reported through STP

  • Include in Gross Earnings On Individual Non Business Payment Summary (Above Threshold) - if ticked, the allowance will be reported as part of the gross earnings amount that is reported through STP if the amount paid is above the taxable threshold (for quantity and amount threshold allowances only)

  • Show on Individual Non Business Payment Summary (Above Threshold) - if ticked, the allowance will be itemised separately from gross earnings when it is reported through STP if the amount paid is above the taxable threshold (for quantity and amount threshold allowances only).

If you have configured a separate set of allowance for WHM and have configured the allowances so that the Include in Gross Earnings on Individual Non Business Payment Summary/ Include in Gross Earnings On Individual Non Business Payment Summary (Above Threshold) options are enabled on all of the WHM allowances, you may want to review your configuration.

For more information about the tax treatment and reporting requirements for allowances, see the following page on the ATO website: https://www.ato.gov.au/business/payg-withholding/payments-you-need-to-withhold-from/payments-to-employees/allowances-and-reimbursements/withholding-for-allowances/

For more information about setting up allowance pay codes in FastTrack360, see Configuring Allowance Pay Codes.

 

 

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