In today’s global economy, people working and studying overseas is commonplace. It’s so common that the Australian Financial Review recently reported that the Australian Taxation Office (ATO) are targeting more than 20 million international visa holders, foreign students and migration agents.
So why is the ATO zoning in on temporary workers?
Basically, it is due to non-compliance and a lack of understanding from both visa holders, sponsors and migration agents of their roles and responsibilities, when it comes to tax and superannuation compliance, so the ATO is making efforts to zone in and crack down on reporting. The Australian Financial Review, recently reported http://www.afr.com/news/ato-ramps-up-data-matching-on-international-students-and-migration-agents-20180118-h0kr49, the ATO’s increase of data matching audits to international visa holders, foreign students and migration agents, and comment that these efforts will assist to help maintain knowledge of tax and superannuation risks, reporting requirements and support the development of methods to crack down on non-compliance.
What does this mean for you?
If you’re an employer of a temporary worker, generally you’ll need to pay superannuation on top of an employee’s wage if you pay them more than $450 (before tax) a month. Be sure to tell your temporary workers that they can access these superannuation payments when their visa expires (or when they leave Australia) via what is known as a “Departing Australia Superannuation Payment”. Usually this payment will be subject to withholding tax (35% for Superannuation Guarantee Charge payments), but it does mean they can access the funds a lot earlier than usual.
If you’re a temporary worker (on a visa), you will have an obligation to lodge a tax return while you’re here. But there are specific tax rules that apply to temporary workers, the main one being that temporary workers will usually only have to pay tax on income earned from Australian sources (such as their wage in Australia).
There are plenty of rules around the employment of temporary workers and they do change quite a bit, so if you have any questions please call us to chat.