Payroll Tax SA

This is general information and not advice. For more complete information go to the South Australian State Revenue Office, Revenue SA

Update 4 September 2018

SA State Budget 2018-19 measures confirm the previously announced abolition of payroll tax for all businesses with a payroll of less than $1.5 million with effect from 1 January 2019.

Payroll tax rates for businesses with annual taxable payrolls between $1.5 million and $1.7 million tax rate that increases proportionately from 0% at $1.5 million to 4.95% at $1.7 million in taxable wages.

For businesses with annual taxable payroll above $1.7 million there is no change to the current general rate of 4.95%.

Legislation for these measures has now been enacted. Further information and calculation information is here.

Update 22 June 2017

From the Budget 2017-18: The payroll tax rate is reduced to 2.5% for small businesses with payrolls between $600,000 and $1 million, and phases to the general rate of 4.95% for payrolls above $1.5 million.  (To apply from 1 July 2017)

Update 7 July 2016

The SA State Government Treasurer confirmed that the small business payroll tax rebate will be further extended until 30 June 2020* (*since retracted to 30 June 2017 in the light of rate concessions announced in the 2017-18 budget). The rebate operated for taxable Australian payrolls up to $1.2 million.  See also: SA State Budget 2016-17

Update 18 June 2015

The SA State Budget for 2015-16 contained an announcement that the small business payroll tax rebate introduced in 2013–14 Budget will be extended for an additional (i.e. third) year to include 2015–16. The rebate provides payroll tax savings for employers with taxable payrolls under $1.2 million.

Update 19 June 2014

The SA State Budget for 2014-15 contained no fresh payroll tax measures.

South Australia payroll tax

Update 5 June 2013 

South Australia 2013-14 State budget provides for concessional payroll tax rates on annual taxable payrolls of $600,000 to $1.2 million in a temporary (2 year) measure commencing 1 July 2013.

To give effect to tax rate reductions, a rebate payment will be paid in the first half of the 2013-14 and 2014-15 financial years, based on eligible employers’ 2012-13 and 2013-14 taxable payrolls respectively.  See SA payroll tax rebates

Payroll Tax Rate in South Australia

Since 1 July 2009 the general rate has been 4.95% of taxable wages. Prior to that it was 5%.

Budget 2018-19 measures: From 1 January 2019

  • the minimum taxable threshold will be an annual payroll of $1.5 million
  • payrolls of between $1.5 million to $1.7 million willed be taxed at a rate that increases proportionately from 0% at $1.5 million to 4.95% at $1.7 million
  • payrolls over $1.7 million to be taxed at the general rate of 4.95%

Calculation assistance for the 2018-19 year and further detailed information is here.

Budget 2017-18 measure: From 1 July 2017  the rate is 2.5% for small businesses with payrolls between $600,000 and $1 million,  phasing to the general rate of 4.95% for payrolls above $1.5 million.

Payroll Tax Threshold in South Australia

The payroll tax annual threshold is $600,000 rising to $1.5 million from 1 January 2019. 

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 of $50,000 and registration is required for the month that that occurs.

RevenueSA recommends registration when the payroll consistently exceeds $11,538 per week.

Due dates

  • Monthly returns and payment are due seven days after the end of each month (however the December 2015 lodgement dates has been extended to 14 January 2016)
  • An annual return and reconciliation is required by 21 July each year, and is required to be electronically lodged through www.revnet.sa.gov.au.

Definition of wages

The payroll tax base include wages and salaries, the definition of which is expanded to include a range of contractor payments, allowances and fringe benefits as they are defined under the Fringe Benefits Tax Assessment Act 1986. Included are payments to third parties for services provided by and employee (or director) to an employer.

To determine the taxability of contractors and employment agency payments, an online decision tool is available.

South Australia payroll tax exemptions

There are a number of exemptions and exclusions from payroll tax in South Australia.  Exemptions may be based on the status of the employer, or the nature of the wages.

The payroll tax exemption for wages paid to apprentices and trainees ceased on 30 June 2012.

Workers compensation payments made in accordance with the Return to Work Act 2014 are not subject to payroll tax – see ruling PTA015_v2

Exempt organisations include

  • from 1 July 2009 non-profit organisations having as their sole or dominant purpose a charitable purpose (Note: prior to 1 July 2009, non-profit organisations were required to have wholly charitable purposes);
  • religious or public benevolent institutions;
  • public hospitals;
  • non-profit child care centre and kindergartens;
  • non-profit schools or colleges for wages paid to persons providing education at or below (but not above) the secondary level of education; and
  • a motion picture production company, being wages paid or payable to a person who is involved in the production of a feature film.  The motion picture production company needs to satisfy the Minister that:
    • the film will be produced wholly or substantially within the state;
    • the production of the film will involve or result in the employment of Australian residents; and
    • the production of the film will result in economic benefits to the State of South Australia.

More details of South Australian payroll tax exemptions, exclusions and links

Allowances

Generally, all allowances are taxable for payroll tax purposes but motor vehicle and overnight accommodation allowances are not considered wages unless they exceed the exempt component. The exempt rates for motor vehicle and accommodation allowances are here.

Employment Agencies

An employment agency arrangement typically involves:

  • the service provider contracting with the employment agent, and
  • the employment agent contracting with the client.

The Payroll Tax Act 2009 provides that an ‘employment agency contract’ is not a ‘relevant contract’, and therefore payments are not exempt under the contractor provisions. Consequently a payroll tax liability remains with the agency.

For further information, the Employment Agency rules and variations of circumstances are more fully described here (pdf).

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

There are grouping exclusions available on the exercise of the Commissioner’s discretion, and there is more detailed information about groups here (pdf).

SA Payroll Tax Registration

Electronic registration and payment of payroll tax is required by the 7th day of the month following the month in which wages exceed the deduction threshold level.

For more information on payroll tax registration in South Australia go here.

Further information

 

 

This page was last modified 2018-12-17