Payroll Tax NT

For more complete information go to Northern Territory Department of Treasury and Finance

Territory Budget News – 7 May 2019

No payroll tax changes were foreshadowed in the 2019-20 Budget statements.

Territory Budget News – 1 May 2018

Northern Territory Budget 2018-19 announcements to take effect from 1 May 2018 include:

  • a temporary payroll tax rebate for the first two years of employment of a new employee who is a Territory resident and works in the Territory, and adds to the number of Territory employees of a business.
  • a rebate for a business that replaces a pre-existing interstate fly-in fly-out (FIFO) worker with a local employee

See 2018-19 budget papers

Territory Budget News – 2 May 2017

Northern Territory Budget 2017-18  – there were no fresh payroll tax measures in the 2017-18 budget.

The first home owner renovations grant first home owners grant schemes will continue.

See 2017-18 budget papers

Territory Budget News – 24 May 2016

There were no fresh payroll tax measures in the 2016-17 budget.

A new Home Improvement Scheme is to be available from 1 July 2016 until 30 June 2017 for home owner-occupiers to get a voucher for home repairs and maintenance carried out by registered Territory small businesses and tradies. The government will match costs on a 50:50 basis to a maximum of $2000.

First home buyers of established homes will get a stamp duty discount of 50% to a maximum of $10,000 available from 24 May 2016 to 30 June 2017. See First Home Owner Discount.

For further budget news go here.

Territory Budget News – 28 April 2015

28 April 2015 – The NT 2015-16 budget contained the following payroll tax measures:

  • Non-profits: Exemptions are to be limited from 1 July 2015, to exclude commercial activities undertaken by charities or entities that promote trade, industry, commerce or professional associations. The amendments are intended not to affect the exemption provided to traditional charities, which have a sole or dominant purpose for the relief of poverty or the
    advancement of education or religion.
  • The payroll tax exemption for apprentices and trainees is to be removed from 1 July 2015, and replaced by direct grants to employers, comprising:
    •  an apprenticeship/traineeship commencement grant of $1000
    • a completion grant of $2000, and
    • a recommencement grant of $500 paid to an employer who employs an apprentice or trainee at some other point
  • The “insurance sellers” and “door-to-door salesperson” payroll tax exclusions will no longer be available from 1 July 2015 (genuine independent businesses are not affected)
  • part-exclusions from payroll tax for contracts which are partly for excluded and non-excluded services will no longer apply
  • the “owner-driver” payroll tax exclusion is to be tightened to ensure that it is to apply to services solely for or ancillary to the conveyance of goods

For more information, see budget.nt.gov.au

Payroll Tax Rate in Northern Territory

The current payroll tax rate is 5.5% of taxable wages in excess of the threshold of $1.5 million.

Above the $1.5 million threshold the deductible amount reduces by $1 in $4 of the excess, such that Australian wages of $7.5 million or more in a year will not receive a deduction.

Payroll Tax Threshold in NT

The current payroll tax annual threshold is $1,500,000 reducing in a sliding scale of $1 in $4 of the excess payroll over this amount.

For monthly returns and the necessary monthly tax calculations, the annual threshold deductible amount is converted to a monthly deduction amount of $125,000 per month.

(The above payroll rate and thresholds have been in place since 1 July 2011.)

Due dates

Monthly returns and payment are due twenty one days after the end of each month.  For an annual liability of $8,400 or less, an annual return and payment may be permitted.

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.

NT payroll tax exemptions

There is a list of exempt employers. Various other exemptions are published here.

Allowances

Generally, all allowances are taxable for payroll tax purposes, but motor vehicle allowances and overnight accommodation allowances are exempt from payroll tax up to thresholds based on rates used by the Australian Taxation Office. See The Exempt Rates – Motor Vehicle and Accommodation Allowances.

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.

Contractor payments is a complex area, and there are anti-avoidance provisions. Professional advice is strongly recommended.

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

A member of a group can apply to be excluded.

Registration

There is online registration for lodgment of returns and payment of payroll tax.

Further information

For further detailed information,  see NT payroll tax publications and rulings and Employers’ Guide to Payroll Tax in the Northern Territory

 

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This page was last modified 2019-05-29