What you need to know about Payroll Tax

Posted by on Aug 1, 2013 in Blog / News | Comments Off on What you need to know about Payroll Tax


Mark Channell, Director of Jigsaw Advisory, has a wealth of knowledge in the accounting industry and he shares with us the ins and outs of Payroll Tax.

It is that time of the year again, 2013 Payment Summaries are due, and quite often, what is overlooked is the business payroll tax liability. It is your responsibility to register for payroll tax, and if you do not, the consequences are considerable to your business.

What is payroll tax? It is a State Tax, imposed by each of the various States and or Territories. It includes, but not limited too… Wages, Directors Remunerations, Superannuation (both superannuation guarantee and salary sacrifice), Fringe Benefits Tax, allowances, ETP’s and even payments to sub contractors under relevant contracts. Certain exemptions / rebates do apply in relation to motor vehicle allowances and apprentices, and the liability is payable, either monthly or annually.

In each State / Territory, the payroll tax threshold varies, as does the rate of tax. Another couple of areas that need to be look at with care are:

  1. Grouping and a group can be constituted under 5 ways:
    1. Related entities
    2. Common employees
    3. Common control
    4. Tracing of interests – controlling interests
    5. Subsuming, where a larger group can be formed out of smaller groups.

The first three are the most common for SME’s however, have you reviewed your structure lately to make sure you have no hidden payroll tax liability

Are you aware of the Rebate Scheme (Jobs Action Plan)?

The Jobs Action Plan is a key priority of the NSW Government and is designed to give NSW businesses the incentive to employ new workers and expand their enterprises in both metropolitan and non-metropolitan areas. Under the plan, businesses that increase the number of full-time equivalent (FTE) employees receive a payroll tax rebate following the employment of each additional employee in a position that is a new job. To be eligible for the rebate scheme, you must be registered as an employer and paying payroll tax under the Payroll Tax Act 2007.

Jigsaw Advisory offers an up front, fixed fee pricing, where you, the client will know what the real cost is, not once the assignment has been completed and the nasty shock is delivered in the mail – The Accountant’s Invoice.

If you would like some more information on Payroll Tax or if you would like advice on Tax Accounting, Planning or Structuring please either email us @ info@jigsawadvisory.com.au or give us a call on 02 9955 2295 and speak to one of our friendly team at Jigsaw Advisory and quote this reference number ACB1308. We will assist you in connecting with your business and therefore to make your accounting and tax experience enjoyable.



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