Case example: Baker Street Pty Ltd


Payroll tax NSW Revenue



  • Please check website for the updated rate

FY2017/18

The payroll tax rate is 5.45%.

The payroll tax threshold for 2017-18 (July – June) is $750,000.

The monthly threshold amounts are:

Days in the month
Threshold
28 days
$57,534
30 days
$61,644
31 days
$63,699

The monthly threshold is calculated using the number of days in the month, divided by the number of days in the year, multiplied by the threshold.

To view rates and thresholds for previous years, visit the rates and thresholds page.



  • What payments are liable for payroll tax?

Payments liable for payroll tax include:

Allowances

Apprentice and trainee wages

Bonuses and commissions

Contractor and consultant wages

Director's fees and other payments

Employment agency contracts

Fringe benefits

Salary sacrifice

Shares and options

Superannuation

Termination payments

Third party payments


  • What payments are not liable?

The following payments are not liable for payroll tax:

Commonwealth Paid Parental Leave Scheme payments

Jury duty payments

Payments made by the court system are not liable. Payments made to an employee by their employer while on jury duty are liable, even if you are partly or fully compensated from the court

Reimbursements

If in the course of work an employee incurs an expense and is reimbursed for that expense against receipts, then the payment is not a wage. You must be able to account for the payments either as an advance which is later adjusted against receipts, or payments against receipts. Any payments that do not have documentation are not accepted as reimbursements and will be liable.

Workers Compensation

Payments made by an insurance company to an employee on workers compensation are not liable.

Make up payments (the difference between the compensation payments and an employee’s regular pay) paid by the employer are liable.


  • items that are not liable, exempt from payroll tax

http://www.osr.nsw.gov.au/taxes/payroll/checklist

Wage type
Liability status
Comments
Aboriginal Persons (payments made to)
Exempt under certain conditions
Wages exempt if an approved project
Accommodation allowances
Exempt component applies

Adoption leave
Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.
Paid in addition to normal leave
Defence Force payments
Exempt
For time taken as military leave
Dividends
Not liable
Return on investment is not liable
Emergency operations
Exempt
For wages paid to a volunteer member involved in emergency operations
Gifts unrelated to service
Not liable
Fringe benefits tax limits apply
Jury Duty (court payments)
Not liable
Payments made by the court system to an employee are not liable wages
Maternity leave
Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.
Paid in addition to normal leave
Motor vehicle allowances paid as flat or fixed amount
Exempt component applies
Applies to business use of private vehicles
Motor vehicle allowances paid on per kilometre basis
Not liable
Applies to business use of private vehicles. The car expense payment must be exempt under the Fringe Benefits Tax Assessment Act 1986
Paid parental leave (PPL) paid by the Commonwealth Government
Not Liable

Partnership drawings
Not liable

Paternity leave
Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.
Paid in addition to normal leave
Portable long service leave fund payments
Not liable

Redundancy benefit scheme payments
Not liable
Payments made into or out of scheme
Reimbursements
Not liable
Must be a business expense which is accounted for
Subscriptions
Exempt component applies
As per Fringe Benefits Tax Assessment Act 1986
Trust distributions
Not liable

Volunteer fire-fighters
Exempt
For wages paid while involved in bushfire fighting activities
Workers compensation
Not liable
Only statutory compulsory amounts are not liable