Payroll Tax
Even though payroll tax is a state-based tax, all wages paid in Australia form a part of the threshold.
Example:
- The Queensland threshold is $1.3M
- The Victorian threshold is $700K
- If you have Queensland wages of $1M and Victorian wages of $350K, you are subject to payroll tax in both jurisdictions
What contributes to “Taxable Wages?
- Salaries and wages including leave, allowances, terminations, and fringe benefits
- Superannuation
- Contractors under relevant contracts, exemptions may apply
- Director fees
- Workers Compensation
Are there exemptions?
- Apprentice wages
- Some contractors
- Jobkeeper
“Grouping”
The practice of “grouping” means that you can’t run two or more entities and expect to avoid payroll tax.
We note that now Holders of Australian Financial Services Licenses and Australian Credit Licenses are now considered to be employers and are subject to the grouping provisions.
Payroll Tax is highly lucrative to the state governments, and they have been refining the collection process for decades. It is difficult to avoid and highly complex at the margins. The various states have harmonised their Payroll Tax Acts to the point where vast tracts of the legislation are identical. It is also worth noting that the state revenue offices have complete access to ATO information such as Activity Statements and Taxable Payment Annual Reports. And, they have shown themselves to be extremely capable when it comes to data mining and calls for audits of businesses.
To discuss these matters further, please contact:
Warren Maris, BCom, FIPA, FFA
Managing Director
Magnus Business Advisers and Accountants
+617 3483 0102
