Unless you get a pay as you go variation notice from the ATO, you must continue to withhold 15% tax from the salary of working holiday makers, regardless of where they are from.
This follows the High Court’s recent judgement in Addy v Commissioner of Taxation. Because of the decision, an eligible working holiday maker may be taxed in the same way as an Australian resident if they are both:
An Australian resident for tax purposes, and from
Chile, Finland, Germany (for 2018 and subsequent income years), Israel (for 2021 and subsequent income years), Japan, Norway, Turkey, or the United Kingdom.
If your employee is a working holiday maker from one of the countries listed above and an Australian resident for tax purposes, they can file a tax return at the end of the fiscal year and receive a tax refund (where eligible).
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