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Tax Planning Time

Tax planning time is upon us once again.  If you haven't done tax planning in previous years and would like to know more about it, please don't hesitate to contact our office.

 BackPacker Tax

After a lot of political horse trading, the “Temporary Working Holidaymakers” Tax (the “Backpacker Tax”) has finally been implemented, taking effect from 1st January 2017.  The Backpacker Tax only applies to holders of 417 and 462 Visas.  Employers who need to find information about the Temporary Working Holidaymakers Rules can do so via the “Visa Entitlement Verification Online” tool.  Employers needed to registerby 31st January 2017 or as soon as they became aware that they would be employing backpackers.  Registration needs to be made via the “Working Holidaymaker Employer Registration Form”.  Once registration has been implemented and documented, employers will need to access the new physical or electronic pay tables for employees via the ATO or the employer’s software provider.  These tables will enable employers to withhold 15% tax for every dollar earned by backpackers with 417 or 462 Visas, up to $37,000.  Employers will have to issue two payment summaries for the year ended 30th June 2017, relative to earnings by the employee and income tax deducted for the periods 1st July 2016 to 31st December 2016, and 1st January 2017 to 30th June 2017.  If an employer is not registered as a “Working Holidaymaker Employer”, the employer will have to deduct a flat 32.5% from every dollar of income paid to a backpacker.  If you are an employer who is employing people on working holidays who have a 417 or 462 Visa and you would like our assistance in the registration process, please contact us urgently.

 Sunday Penalty Rates

Union groups have warned someworkers could lose up to $6000 a yearafter the Fair Work Commission agreed to slash Sunday and public holiday penalty rates for hospitality, restaurant, fast food, retail and pharmacy workers.  Up to one million workers across those industries will have their penalty rates cut by 25 to 50 per cent after the FWC handed down its long-awaited decision.  Retail and business groups had been leading the case to reduce Sunday penalty rates from double time (200 percent) to time-and-a-half (150 per cent), in line with Saturday penalty rates.  Fulltime and part-time hospitality workers will have Sunday rates slashed from 175per cent to 150 per cent.  Sunday rates for casuals will remain at 175 per cent.  Fulltime and part-time level one fast-food workers will have Sunday penalty rates reduced from 150 per cent to 125 per cent, but level two and three employees will stay at 150 per cent.  Fulltime and part-time retail workers will have Sunday rates reduced from 200 per cent to 150 per cent, while casuals will be reduced from 200 percent to 175 per cent.  For pharmacy workers, Sunday rates for work between 7am and 9pm will be reduced from 200 per cent to 150 percent for fulltime and part-time, while casuals will be reduced from 200 percent to 175 per cent.  Public holiday rates have also been cut from 250 per cent to 225 per cent for fulltime and part-time hospitality, restaurant, retail, fast-food, and pharmacy workers.  Casuals in those industries, except for restaurants, will have their public holiday rates cut from 275 per cent to 250 per cent.  Some early and late-night loadings for restaurant and fast-food workers have also been adjusted.  Changes to public holiday penalty rates will take effect on1 July 2017, and the variations of the early and late-night work loadings will take effect in late March 2017.  If you believe you are likely to be affected by these changes, please contact EnVision Partners to discuss how your business is likely to be impacted.

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