PAYROLL TAX

What is Payroll Tax

Payroll tax is a state tax assessed on wages paid or payable to employees by an employer whose total Australian taxable wages exceed the threshold amount.

See NSW thresholds at https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/payroll-tax/rates-and-thresholds

Who needs to pay payroll tax?

If you’re an employer who pays wages in NSW, you must register for payroll tax if your total Australian wages exceed the relevant monthly threshold.

If you’re a member of a group of businesses, the total Australian wages paid by all members of the group determines whether you should register for payroll tax.

Contractors

Payments to contractors are liable for payroll tax unless an exemption applies.

Exemptions include,

1. Services ancillary to the supply of goods

2. Services not ordinarily required by your business

3. Services required for 180 days or less in a financial year

4. Services provided for 90 days or less in a financial year

5. Services approved by the Commissioner as exempt

6. Services performed by two or more people

7. Services provided by an owner-driver

Your Payroll Tax Liability

The thresholds and rates for payroll tax can change, so employers must stay informed about any updates the relevant state revenue authorities provide.

Compliance with payroll tax regulations is crucial to avoid penalties and ensure that businesses meet their obligations. To do this, connect with NLJ Partners.