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
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
Agenda
• What is payroll tax?
– Thresholds, deduction entitlement and rates
• What is taxable?
• Exclusion and exempt employers
• Interstate (and overseas) workers
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
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
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
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
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
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%
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#
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
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
Employees Deemed
employees Company directors
SGC amounts
>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 redundancy OR early retirement scheme
Employee termination payments
Pay in lieu
Contract payouts
Golden handshakes
Severance payments
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
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
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 (PPB) 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, exemptions and rebates
Webinar Three Contractors
Webinar Four Groupings
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