Webinar 1:

Understanding the basics –what it is, how it works

Payroll Tax Webinars

Webinar One Understanding the basics –what it is, how it works

Webinar Two Allowances, FBT, exemptionsand rebates

Webinar Three Contractors

Webinar Four Groupings

Agenda

• What is payroll tax?

– Thresholds and rates

• What is taxable?

• Exclusion and exempt employers

• Interstate (and overseas) workers

Payroll Tax in a Nutshell

• Self assessed tax paid monthly

• Apportioned tax free threshold amount for part year/interstate employers

• Harmonised legislation

• Employees or ‘deemed employees’

• Liable employers are required to apply for registration

Tax Free Threshold – 2015-16

NSW SA VIC QLD

$750,000 $600,000 $550,000 $1,100,000*

NT TAS WA ACT

$1,500,000* $1,250,000 $800,000* $1,850,000

Liability in a state exists if:

1. Services are performed wholly in that state; and2. Australia wide wages exceeds threshold

* Note: reduces as wages increase

Tax Free Threshold

Employing for full financial year

Employing for half financial year

Employing for three quarters of

financial year

Receive full tax free

threshold

Receive ¾ tax free threshold

Receive half tax free threshold

Tax Free Threshold

Vic $600,000

SA

$300,000

Tas $600,000

Total Australian Wages $1,500,000AdjustedTasmanianTax Free Threshold:

$600,000

X $1,250,000$1,500,000

= $500,000

AdjustedVictorian Tax Free Threshold:

$600,000

X $550,000$1,500,000

= $220,000

Adjusted South Australian Tax Free Threshold:

$300,000

X $600,000$1,500,000

= $120,000

Payroll Tax Rates – 2015-16

NSW SA VIC QLD

5.45% 4.95% 4.85% 4.75%

NT TAS WA ACT

5.5% 6.1% 5.5% 6.85%

What is Taxable?

Liable Wages

Salaries & Allowances

Apprentice payments

(not all jurisdictions)

Leave

Super, bonuses &

commissions

Fringe benefits

Termination payments

Shares & Options, & Directors

Fees

Apprentices

SA NSW TAS VIC

Taxable Taxable# Taxable# Taxable#

QLD NT WA ACT

Exempt# Taxable# Exempt# Taxable (1st year)

#Be mindful that some conditions apply – contact relevant revenue

office for more information

Leave Payments

Leave payments are taxable

Annual leave

Sick leave

Long service leave

Leave loading Maternity and adoption leave are not taxable

Director’s Fees

Director’s Fees are taxable

Profit Distribution

Non-working Directors

Regardless of where paid to

Working Directors

Shares & Options

Value of shares or options on ‘the relevant day’ LESS any consideration paid by employee

Grant Date Vesting Date

Market value or amount determined by Income Tax Assessment Act 1997

Superannuation Contributions

All pre-tax superannuation contributions are taxable

EmployeesDeemed

employeesCompany directors

SGCamounts

>SGC amounts

Salary sacrifice

Top-up contributions

Termination Payments

Taxable

All leave paid on termination

Director termination

Contractor termination

Income tax free components of a genuine redundancyOR early retirement scheme

Employee termination payments

Pay in lieu

Contract payouts

Golden handshakes

Severance payments

Exclusions

Fire & Emergency Services Duty Some conditions may vary

between states and territories –please check for finer details with

the relevant revenue officeWorker’s Compensation

Maternity & Adoption Leave

Defence Force Reserves Duty

Exempt Employers

PBI & charitable

organisations*

Public hospitals

Non-profit private

hospitals

Non-profit private schools

Government – local**, Governors and foreign representatives staff

In some states you need to apply for an exemptionCheck with the relevant revenue office

*exemption criteria applies to charitable organisations in the Northern Territory, Victoria and Western Australia**not available in Tasmania

Where are Wages Taxable?

If the work is performed solely

in one jurisdiction in a month

Wages taxable in that jurisdiction

General Rule

An area of confusion with payroll tax is how to treat wages paid to workers who work in other states/territories or overseas

Interstate Workers

The work is performed in

more than one state/territory

(and/or overseas) in a month

Wages are taxable where

The employee’s principal place of residence is located

The employer’s business is registered

1

2

If no principal place of residence then

If employer’s business is not registered in Australia or does not have a

principal place of business (PPR) then

Interstate Workers

The work is performed in

more than one state/territory

(and/or overseas) in a month

Wages are taxable where

The bank account the employee’s wages are paid into

Where the work is predominately performed

3

4

If not paid into an Australian bank account then

Overseas Workers

Employees working overseas

> 6 months: exempt

< 6 months: where paid?

Employees from overseas

Work performed only in one state

Liable in that state

Work performed in more than one state

Test 2 to 4 applies

Payroll Tax Webinars

Webinar One Understanding the basics –what it is, how it works

Webinar Two Allowances, FBT, exemptionsand rebates

Webinar Three Contractors

Webinar Four Groupings

Further information

payrolltax.gov.au

NSW SA VIC QLDosr.nsw.gov.au1300 139 815

revenuesa.sa.gov.au08 8204 9880

sro.vic.gov.au13 21 61

osr.qld.gov.au1300 300 734

NT TAS WA ACTtreasury.nt.gov.au

1300 305 353sro.tas.gov.au03 6166 4400

osr.wa.gov.au08 9262 1300

revenue.act.gov.au02 6207 0079