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Re: Two visas during the financial year, different tax rates

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Hi guys!

 

I have earned money accross two different visas during this financial year:

- Under a WHV (subclass 417) within a company that is not registered as an employer of working holiday makers with a taxable income of less than $37,000

- Under a Student Visa (subclass 500) with a taxable income between $37,001 – $87,000

 

As working holiday makers' incomes are taxed differently, how can I sort things out and get taxed the right amount for all my income? I understand my income under the WHV would be taxed at 15% while my income under the Student Visa would be taxed following the resident tax rates.

Is my understanding correct? I believe I am facing two different tax rates and I would like to know how to handle this for my 2017-2018 tax return. Any help? Smiley Happy

 

Thank you in advance for your help.

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Hi @Florent

 

Thanks for the follow up!

 

When completing your income tax return, you don't need to differentiate the two take rates. You report your income and tax withheld from each employer and we'll calculate your total income and tax liability for the whole financial year. We'll apply the credits (tax withheld) to your tax liability and if you've paid too much you will receive a refund. 

 

If the employer you're working for isn't registered with us as a working holiday maker employer, they will be required to withhold at foreign resident rates as stated in the tax tables for weekly, fortnightly or monthly payments. 


Hope this helps. 

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Hi @Florent

 

Welcome to our Community! You're right - the change in your visa status may mean a difference in tax rates that apply to your income throughout the financial year. One of the most important things you'll need to work out if you're on a student visa is whether you're considered to be an Australian resident for income tax purposes. Residency for tax purposes is very different to residency for immigration purposes, and different tax consequences may apply if you're considered to be a non-resident. Our residency calculators may be able to help you work your status out. 

We've also developed a guide for working holiday makers to help them complete their income tax return correctly - it contains useful info on when you need to lodge and whether or not you'll need to pay the Medicare Levy. If you think you may need assistance completing the tax return form yourself and you meet certain eligibility criteria, you may also be eligible for Tax Help - free assistance from ATO trained volunteers to help you lodge your return. 

 

Thanks!

 

Newbie

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Hi @AmandaE

 

Thank you for your input.

I can confirm I will be a resident for tax purposes for the 2017-18 financial year (as I am enrolled in a course that is more than 6 months long at an Australian institution).

 

However, following tax reforms for Working Holidays makers in 2017, they are not considered as resident for tax purposes anymore (if I understood correctly). Therefore, different tax rates would apply to my income, whether earned as a Working Holidays maker (for about 4 months during this financial year) or a full-time student (8 months during this financial year).

 

How can I sort out / "differentiate" these two different tax rates within the same tax return?

 

Also, just wondering if working, as a Working Holidays maker, for a company that is not registered as an employer of working holiday makers would imply a different tax rate like it was the case before the 2017 reforms (32.5% instead of 15%)?

 

(I am not eligible for Medicare benefits and will not pay the Medicare levy)

 

Thanks again for your assistance.

Newbie

Replies 0

Hi @AmandaE

 

Thank you for your input.

I can confirm I will be a resident for tax purposes for the 2017-18 financial year (as I am enrolled in a course that is more than 6 months long at an Australian institution).

 

However, following tax reforms for Working Holidays makers in 2017, they are not considered as resident for tax purposes anymore (if I understood correctly). Therefore, different tax rates would apply to my income, whether earned as a Working Holidays maker (for about 4 months during this financial year) or a full-time student (8 months during this financial year).

 

How can I sort out / "differentiate" these two different tax rates within the same tax return?

 

Also, just wondering if working, as a Working Holidays maker, for a company that is not registered as an employer of working holiday makers would imply a different tax rate like it was the case before the 2017 reforms (32.5% instead of 15%)?

 

(I am not eligible for Medicare benefits and will not pay the Medicare levy)

 

Thanks again for your assistance.

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Newbie

Replies 3

Hi @AmandaE

 

Thank you for your input.

I can confirm I will be a resident for tax purposes for the 2017-18 financial year (as I am enrolled in a course that is more than 6 months long at an Australian institution).

 

However, following tax reforms for Working Holidays makers in 2017, they are not considered as resident for tax purposes anymore (if I understood correctly). Therefore, different tax rates would apply to my income, whether earned as a Working Holidays maker (for about 4 months during this financial year) or a full-time student (8 months during this financial year).

 

How can I sort out / "differentiate" these two different tax rates within the same tax return?

 

Also, just wondering if working, as a Working Holidays maker, for a company that is not registered as an employer of working holiday makers would imply a different tax rate like it was the case before the 2017 reforms (32.5% instead of 15%)?

 

(I am not eligible for Medicare benefits and will not pay the Medicare levy)

 

Thanks again for your assistance.

Best answer

Community Support

Replies 2

Hi @Florent

 

Thanks for the follow up!

 

When completing your income tax return, you don't need to differentiate the two take rates. You report your income and tax withheld from each employer and we'll calculate your total income and tax liability for the whole financial year. We'll apply the credits (tax withheld) to your tax liability and if you've paid too much you will receive a refund. 

 

If the employer you're working for isn't registered with us as a working holiday maker employer, they will be required to withhold at foreign resident rates as stated in the tax tables for weekly, fortnightly or monthly payments. 


Hope this helps. 

Newbie

Replies 1

Hi @JodieH

 

(sorry for the triple message Smiley Sad )

 

I think it does help, yes.

In fact, the ATO will know on what visa I was for each payment summary (maybe with the "type" of income such as H, S, etc.) and with the ABN of the employers, they'll know if they are registered as working holiday maker employers, right? So they know exactly what tax rate to apply for to each income.

 

Good news is I don't have anything particular to do and ATO will sort this out.

Bad news is I will have an important owing balance to pay. Smiley Sad

 

Anyway, thank you both for your help!

 

Cheers,

Florent.

Community Support

Replies 0

Hi @Florent,

 

Thanks for the follow up!

 

Yes, we'll work out your tax liability based on the information you report in your tax return and apply to relevant tax rate. We'll cross-check certain information with other government agencies to verify information.

 

If you end up with a tax bill and you can't pay in full by the due date, you may be able to enter into a payment arrangement via myGov, or you can phone us on 13 11 42 between 8am - 6pm, Monday to Friday to discuss a payment arrangement

 

Thanks, JodieH.

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