How to change an employee's Working Holiday Maker status?

It is essential that employees classified as working holiday makers (WHM) are marked accordingly. The reasons for this include:

• WHMs are taxed differently to Australian residents so an incorrect classification can over/under tax the employee. Under taxing a WHM will then have consequences at tax time for that employee;
• When reporting pay events and/or lodging payment summaries to the ATO, employees classified as WHMs must be indicated as such with an "H" code. Non-WHMs are indicated using an "S" code. This happens automatically in the platform and uses the "Is approved working holiday maker" checkbox (in the employee's Tax File Declaration) screen to correctly classify.

Once an employee has been set up in payroll and a change to their WHM status is required (due to incorrect classification or an update to their tax status), you can do this using the following instructions:

1. Select the employee's name, then Tax File Declaration. Click on the "Is approved working holiday maker" checkbox to tick/untick the existing setting.
2. A modal will then appear so you can choose when the updated status is to take effect. This allows you to back date the setting so that the employee is then classified correctly from when they were/were not a WHM. You can choose from applying the updated setting from today, the employee's start date or a specific historic date. You will not be able to set a future date.  Select the applicable 'as of' date and then Save.

Please note the following:

• Changing this setting does not automatically adjust an employee's historic PAYG amount. If you wish to adjust PAYG calculated in previous pay runs you will need to do this manually and process a PAYG adjustment in a pay run.
• This 'back date' functionality only works directly when updating via the employee's settings. If you are changing the WHM status for an employee using the employee file import or via API, the 'as of' date will be the date the change was made when using those methods.
• If choosing a custom historic date, take note that the date entered here will take effect from the pay run where the date is within the pay run's pay period. For example, if the 'as of' date entered is 12/2/20 and the employee is paid on a weekly pay frequency, the WHM updated setting will take effect, for ATO reporting purposes, from the pay run where the pay period includes 12/2/20.

If your employee should not have been marked with a WHM status, follow the instructions above to correct this. Then, go back into the pay event you have created and select Actions, then Refresh Data in order for the update to take effect. If a finalisation event has already been lodged with incorrect WHM settings, you will need to lodge an Amended Finalisation event.

-Kass