Payroll Tax Tasmania

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

Update 14 June 2018

The Tasmania State Budget for 2018-19 provided or confirmed the following measures:

  • an extension of the Payroll Tax Rebate Scheme for apprentices and trainees, in areas of skills shortages, to 30 June 2021;
  • from 1 July 2018 a reduced rate of 4% payroll tax for wages between $1.25 million and $2 million
  • relocation to a Tasmanian regional area – a 3 year payroll tax exemption for wages paid by a business to its employees in regional Tasmania, where a mainland business relocates and establishes operations in a regional area between 1 July 2018 and 30 June 2021.
  • See fact sheets (pdf): Payroll tax change  Payroll tax rebate scheme

Update 24 May 2017

The Tasmania State Budget 2017-18 provides for the introduction of a payroll tax rebate for new apprentices, trainees and youth employees aged 15 to 24 recruited from 1 July 2017 to 30 June 2019. See further Tas. Budget link 2017-18

Update 26 May 2016

The Tasmania State Budget 2016-17 contains no material changes to payroll tax. See Tas. Budget link 2016-17

Payroll Tax Rate in Tasmania

– is (since 1 July 2003) 6.1 % of taxable wages – from 1 July 2018 a reduced rate of 4% payroll tax for wages between $1.25 million and $2 million

Employment Incentive Scheme (Payroll Tax Rebate)

A scheme to encourage employment by providing employers with full payroll tax rebates on wages paid to new employees between 1 July 2014 and 30 June 2016.  See guidelines.

Payroll Tax Threshold in Tasmania

The payroll tax annual threshold since 1 July 2013 has been $1,250,000 (increased from $1.01 million).

The monthly threshold is  calculated by dividing the number of days in the month by  days in the year multiplied by the annual threshold.

e.g. threshold for June 2018 is: 30 ÷ 365 x $1.25 million  = $102,740

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

For historical rates and thresholds see here.

Due dates

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

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 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.

A checklist of taxable items is included in the Tasmanian payroll tax employer’s guide.

Tasmania payroll tax exemptions

The payroll tax exemption application form lists exemption categories which are also listed in the employer’s guide.

An Employment Incentive Scheme (Payroll Tax Rebate) provides employers with a Payroll Tax rebate for up to 2 years on newly created positions. See here.

A 3 year payroll tax exemption is to be provided to businesses relocating to a Tasmanian regional area.

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 Ruling PTA005 Exempt Allowances – Motor Vehicle and accommodation and the employer’s guide.

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.

For further information: PTA038  Title : Determining whether a worker is an employee and PTA019 Contractors – Labour and Non-Labour Components.

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 relevant contractor provisions are not applicable where a contract worker is provided
under an employment agency contract. Consequently a payroll tax liability remains with the agency.

For more detailed information, see rulings.

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. For more detailed information, see rulings.

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.

Further information

 

 

This page was last edited 2018-12-08