ACT Payroll Tax

This is general information and not advice. For more complete information go to the ACT Revenue Office.

ACT Payroll Tax Rate

– The payroll tax rate is 6.85% of taxable wages

Payroll Tax Threshold in ACT

– From 1 July 2016 the annual tax threshold is $2 million or $166,666.66 per month

– From 1 July 2014 to 30 June 2016 the annual tax threshold was $1.85 million or $154,166.66 per month

Harmonisation – In a 2014-15 budget measure the ‘genuine employer’ exemption has been removed with effect from 1 January 2015 for employment agents to bring the ACT more into line with other jurisdictions.

The payroll tax annual threshold for the 2013-14 financial year was $1,750,000 or $145,833.33 per month

Rates and thresholds for earlier years are here.

The threshold amount is deducted from annual Australian wages to determine the actual payroll tax liability for the year. This calculated liability is then compared to the total of monthly returns, resulting in either a balance to pay, or a refund due.

For monthly returns and the necessary monthly tax calculations, the annual deduction is converted to a monthly deduction amount.

ACT Payroll Tax Due dates

  • Monthly returns and payment are due seven days after the end of each month, except for December (14 days) and June
  • An annual reconciliation return is required by 21 July each year, which includes the June return

Due dates falling on a weekend or a public holiday, are automatically deferred until the next working day.

Definition of wages

Taxable wages for payroll tax purposes includes not only wages/salaries, but also employer superannuation contributions, commissions, bonuses, allowances, directors’ fees, fringe benefits, the taxable component of termination payments and payments to relevant contractors.

The definition of wages is also expanded to include a range of contractor payments, allowances and fringe benefits as they are defined under the Fringe Benefits Tax Assessment Act 1986.

ACT payroll tax exemptions

Exemptions include:

See further here: exempt wages and payments

Allowances

Generally, all allowances are taxable for payroll tax purposes but motor vehicle and overnight accommodation allowances are not unless they exceed the exempt component. The exempt rates for motor vehicle and accommodation allowances are based on the fringe benefits tax position. See PTA005 – Exempt Allowances – Motor Vehicle and Accommodation and PTA011 Allowances and Reimbursements

Payroll tax and contractors

The definition of wages for payroll tax purposes includes payments contractors who provide predominantly labour, and who mainly work for one person. The contractor provisions can apply whether or not the services are provided through another entity such as a company or trust, and deemed wage amounts exclude any GST component.

The following ACT Revenue Circulars should be consulted:

PTA018 Contractor Deductions

PTA019 Contractors – Labour and Non‐Labour Components

PTA021 Exemption for Contractors ordinarily rendering services to the public

PTA022 Contractors – Services Not Ordinarily Required

PTA074 Exemptions for Employment Agents

See also Contractors here

Grouping provisions

Payroll values of grouped entities are added together for taxing purposes so that the deductible threshold is only available once within groups of related parties. Relationships (and hence aggregation of payroll amounts) are determined on the basis of :

  • Related companies according to the Corporations Act definition
  • Use of common employees
  • Common control by one or more persons
  • Tracing of aggregate controlling interests

The Commissioner may exclude a person from group membership for payroll tax purposes upon written application.

ACT Payroll Tax Registration

Registration is online and payment of payroll tax is required by the 7th day of the month following the month in which wages exceed the monthly deduction threshold level. See more: Registration for ACT Payroll circular (PTA071).

Further information

For further detailed information see all ACT Revenue Office circulars here.

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This page was last modified 2017-12-16