We know that most employers want to do the right thing. To help you meet your obligations, we have put together this list of areas to watch out for when calculating payroll tax.
Taxable wages
Make sure you include and correctly declare your taxable wages, including:
• allowances
• remuneration
• bonuses
• salary
• commissions
• superannuation
• contractor payments
• wages (cash and non-cash)
• fringe benefits
Superannuation contributions
All superannuation contributions are taxable, including payments to non-employee directors. Make sure you include any superannuation payments paid outside your payroll system (e.g. top-up payments to a director’s superannuation fund).
Directors remuneration
Directors remuneration is taxable and may include payments to a director’s trust or incorporated entity.
Fringe benefits
Fringe benefits are taxable, calculated on the Type 1 and Type 2 aggregate amounts grossed up by the Type 2 gross-up factor.
Fringe benefits that have a nil taxable value under the Fringe Benefits Tax Assessment Act 1986 will also have a nil taxable value for payroll tax purposes.
Read the public ruling on fringe benefits {PTA003} for more information on this topic and how to apportion the Queensland component of your fringe benefits.
Contractor payments
Any payments you make to contractors, subcontractors and consultants are taxable unless they meet one of the 9 contractor exemptions. You should also consider if your contractor is a common law employee.
Use our contractor provisions interactive help to determine if your contractor payments are taxable.
Apprentices and trainees
Payments to apprentices employed under the Further Education and Training Act 2014 (FET Act) are exempt.
Payments to trainees registered under the FET Act are exempt; unless before commencing the traineeship, the trainees worked for you for 3 months or more full time or for 12 months or more part time or casually.
The exemption applies for any certificate registered under the FET Act, including certificate IV. Other rules apply for certificates II and III.
You may also be entitled to a payroll tax rebate.
Group relationships
Related businesses are treated as a group for payroll tax purposes. One business, the designated group employer (DGE), claims any deduction entitlement on behalf of the whole group. The deduction is based on the total Australian wages of all group members. All other group members pay 4.75% of all taxable wages. The DGE and all group members must lodge separate returns.
Interstate employees
Use our taxable wages interactive help to determine if you should declare your wages in Queensland or another state or territory.
See also the public ruling on payroll tax nexus provisions {PTA049}.
Allowances
Accommodation and motor vehicle allowances have an exempt rate. If an allowance paid to an employee exceeds the exempt rate, the excess amount is taxable.
To claim a motor vehicle allowance exemption, records must be kept to prove business kilometres.
Talk to Quill Group Today
Get in touch with us today to find out how we can assist you in navigating your payroll taxation for your business. We’re a team of over 60 specialists, here and ready to help you with your specific business needs.
