Working Holiday makers who change to a Bridging Visa

Cheryl Medley

I have a payroll that I do for a client in his account in Hosted. He employs mostly working holiday people, but recently a few of the workers who have been with him for a while have been granted a bridging visa. I have no idea of how to deal with this!

Should I disengage the workers then re-employ them with the new visa set up, or can I simply change their details within their current set up? I have had a lot of chats with Mr Google, but he is only taking me to places that assume I am the worker, and not the other way around.

Does anyone know how this should be dealt with?

Acctd4

@Cheryl Medley Definitely do NOT set up separate employee records! This can cause major issues with STP due to requiring unique employee numbers. The employees are still employed so you just need to change their tax codes.

There are a few possibilities depending on the employees’ specific visa classes & what their intentions are.

They will either continue to be treated as WHMs (if the bridging visa specifically relates to it), be taxed as residents or be taxed as non-residents.

Cheryl Medley

Thank you, Shaz. I was hoping I just needed to update their tax status. I didn't intend setting them up as a new employee, just re-employing them with the same details except for tax. At this stage I haven't seen their new paperwork, but I need to do a pay run in the morning and will have to have them taxed correctly. I believe their bridging visa is an 886, which according to Mr G entitles them to be classed as an Australian citizen and entitles them to all that is equal to a permanent citizen. I will go with your advice tomorrow.

Acctd4

I believe that one allows them to stay here permanently, which would mean they’re under the standard TFT.

Just edit their records & add Date-Stamped Notes with relevant details for future reference. Re-Hiring is only if an employee leaves & then is re-employed at a later time.

Acctd4

I'd also recommend checking the employees' scenario against this info here:

https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/australian-residency-if-you-re-on-a-working-holiday-or-visit#Examples4and5

Cheryl Medley

Thank you, Shaz. I looked in a lot of places in the ATO portal, but didn't come across this one! Because I haven't actually seen their paperwork as yet (my client said he would bring it all in today, but nothing at this time), I do feel reluctant to change their tax status just yet. The thing is, they are working a lot of hours and are actually better off tax wise under their holiday maker status than if they change to foreign resident, which I don't think they realise. I'll keep things as they are until such times as I see what they have and go from there. This client always does the setting up with his employees and I just do the pays. But now he is extending more work towards me, and since I haven't had to deal with holiday makers with my other clients, I am very wary. Thank you again. You have been a great help! Cheers.

Acctd4

@Cheryl Medley They may be better off now however when they do their tax return, if they’re not taxed sufficiently, they’ll have a tax bill! 😬

Cheryl Medley

Yes, I know! That's what triggered things apparently. They put their tax returns in and were told they were on WHM status, so no returns. I've done their pays (just two at the minute) with the updated status and let them know they are paying a bucket load more in tax. I still haven't seen their paperwork, so I am crossing my finger that this client really knows what he's doing. He is not Australian born either. I inherited him from his previous book keeper whom he had when was in a different area before moving to my area. I'm still nervous.

I keep thinking they should have given this new info to my client as soon as they received it - assuming this is what happened - and the changes should have been made from that date. I don't like messing with the ATO!

Acctd4

" … They put their tax returns in and were told they were on WHM status, so no returns …"

WHMs still need to lodge a tax return IF they earn over the WHM income threshold (currently 45K) or if they want to claim deductions.

Cheryl Medley

Yes, I have a problem with that answer too, but since I am not directly involved with the workers,I have to take my client's word for what they told him. I doubt they would have reached that threshold, but I don't know what they earned prior to coming to work for my client. I'm leaving it up to the employees to sort themselves with the ATO. I can only do what I know about them.

I think the problem is they thought they would get some money back. I doubt they would have had any claims to make, apart from maybe accomodation as travel was supplied. They maybe didn't understand what they were being told by ATO person too.

Thank you again for your help with this issue. It has straightened a lot of things in my brain!