Seasonal workers tax obligations


Due to the COVID-19 pandemic and closed borders, many seasonal workers who were a part of the seasonal work program (SWP) have been stuck in Australia since their visa ended. With uncertainty of tax consequences stemming from their visa status, many workers as well as employers are rightly confused as to the tax obligations they have. 

In short, the seasonal workers program allowed employers in the agriculture sector and selected locations to access a pool of reliable returning workforce when there is not enough local Labour to meet seasonal demand. Originally, workers under the SWP were considered to be non-residents of Australia for tax purposes, unless they stay in Australia after they finish working on the program. This is where the confusion comes in, as these workers have now been made to stay in Australia involuntarily due to closed borders and difficulty getting flights home.

To clear up the confusion, the ATO has issued a clarification for these workers. If you are a worker that has been participating in the SWP and continue to do so, and were previously on a Temporary Work (International Relations) subclass 403 visa and are now on a different temporary visa, the ATO is currently attempting to make arrangements to ensure that previous taxation arrangements remain. This includes those workers who were previously on a subclass 403 visa and have subsequently moved to either a Bridging visa E, Temporary Activity (subclass 408), or AGEE – COVID-19 Pandemic event visa (subclass 408 visa).

According to the ATO, you will not need to lodge a tax return if:

  • you're a foreign resident;
  • the only income you earn in Australia is from SWP (including salary, wages, commission, bonuses or allowances), or bank interest from an Australian bank; and
  • your SWP approved employers withheld 15% tax on your behalf.

The ATO further notes that those workers in Australian on a subclass 403 visa, a subclass 408 visa or a Bridging visa E to participate in the SWP are unlikely to a resident of Australia for tax purposes and that a change of visa from one class to a different temporary visa will not of itself change the residency status of the worker.

For qualifying workers that have already lodged their 2019-20 tax return, the ATO says they will not need to do anything as arrangements are being made to ensure that the tax obligations remain the same for SWP workers that have moved to new temporary visas.

For those workers that have recently lodged their 2019-20 tax return, the ATO will issue a notice of assessment once they’ve completed the arrangements. If you’re one of those workers that lodged early and have already received a notice of assessment, the ATO will contact you once the arrangements are complete.

Category: News