Webinar 1: Understanding the basics what it is, how …...Webinar 1: Understanding the basics –...

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Webinar 1: Understanding the basics – what it is, how it works

Transcript of Webinar 1: Understanding the basics what it is, how …...Webinar 1: Understanding the basics –...

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Webinar 1:

Understanding the basics – what it is, how it works

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Payroll Tax Webinars

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

Webinar Two Allowances, FBT, exemptions and rebates

Webinar Three Contractors

Webinar Four Groupings

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Agenda

• What is payroll tax?

– Thresholds, deduction entitlement and rates

• What is taxable?

• Exclusion and exempt employers

• Interstate (and overseas) workers

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Payroll Tax in a Nutshell

• Self assessed tax

• Usually 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

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When do I need to register?

NSW SA VIC QLD

$900,000 $1,500,000 $650,000 $1,300,000

NT TAS WA ACT

$1,500,000 $1,250,000 $850,000 $2,000,000

Liability in a state exists if:

1. Services are performed in that state; and 2. Australia wide wages exceeds threshold

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Threshold Reduction

Employing for full financial year

Employing for half financial year

Employing for three quarters of

financial year

Full threshold

Three quarter threshold

Half threshold

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Deduction Entitlement – 2019-20

NSW SA VIC QLD

$900,000 $600,000 $650,000 $1,300,000*

NT TAS WA ACT

$1,500,000* $1,250,000 $850,000* $2,000,000

*Note: Deduction entitlement reduces as wages increase in Qld, NT & WA

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Deduction Entitlement

Vic $600,000

WA

$300,000

Tas $600,000

Total Australian Wages $1,500,000 Adjusted Tasmanian Deduction Entitlement:

$600,000

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

= $500,000

Adjusted Victorian Deduction Entitlement:

$600,000

X $650,000 $1,500,000

= $260,000

Adjusted Western Australia Deduction Entitlement:

$300,000

X $850,000 $1,500,000

= $170,000

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Payroll Tax Rates – 2019-20

NSW SA VIC QLD

5.45% Varies from

0% to 4.95% depending on wages paid for full

financial year

4.85% Metro

2.425% Regional

4.75% (wages $6,500,000 or less)

4.95% (wages above $6,500,000)

*regional employers may be

entitled to a 1% discount on the rate.

NT TAS WA ACT

5.5% 4% (wages $1,250,001 to $2,000,000)

6.1% (wages $2,000,001 and above)

Varies from

5.5% to 6.5% depending on wages paid for

full financial year

6.85%

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What is Taxable?

Liable Wages

Salaries & Allowances

Apprentice payments

(not all jurisdictions)

Leave

Super, bonuses &

commissions

Fringe benefits

Termination payments

Shares & Options, & Directors

Fees

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Apprentices

SA NSW TAS VIC

Taxable Taxable#

Rebate*

Taxable#

Rebate*

Taxable#

QLD NT WA ACT

Exempt#

Rebate*

Taxable# Exempt# Taxable#

#Be mindful that some conditions apply – contact relevant revenue

office for more information

*Rebate may also be available - contact relevant revenue office

for more information

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Leave Payments

Leave payments are taxable

Annual leave

Sick leave

Long service leave

Leave loading Maternity and adoption leave are not taxable

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Director’s Fees

Director’s Fees are taxable

Profit Distribution

Non-working Directors

Regardless of where paid to

Working Directors

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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

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Superannuation Contributions

All pre-tax superannuation contributions are taxable

Employees Deemed

employees Company directors

SGC amounts

>SGC amounts

Salary sacrifice

Top-up contributions

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Termination Payments

Taxable

All leave paid on termination

Director termination

Contractor termination

Income tax free components of a genuine redundancy OR early retirement scheme

Employee termination payments

Pay in lieu

Contract payouts

Golden handshakes

Severance payments

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Exemptions

Fire & Emergency Services Duty Some conditions may vary

between states and territories – please check for finer details with

the relevant revenue office Worker’s Compensation

Maternity & Adoption Leave

Defence Force Reserves Duty

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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 exemption Check with the relevant revenue office

*exemption criteria applies to charitable organisations in the Northern Territory, New South Wales, Queensland, Victoria and Western Australia

**not available in Tasmania

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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

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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 (PPB) then

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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

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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

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Payroll Tax Webinars

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

Webinar Two Allowances, FBT, exemptions and rebates

Webinar Three Contractors

Webinar Four Groupings

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Further information

payrolltax.gov.au

NSW SA VIC QLD

revenue.nsw.gov.au 1300 139 815

revenuesa.sa.gov.au 08 8204 9880

sro.vic.gov.au 13 21 61

qld.gov.au 1300 300 734

NT TAS WA ACT

treasury.nt.gov.au 1300 305 353

sro.tas.gov.au 03 6166 4400

wa.gov.au 08 9262 1300

revenue.act.gov.au 02 6207 0079