Legislative changes Budget Session 2007
Payroll Tax Act 2007
Commences on 1 July 2007
Repeals the Pay-roll Tax Act 1971
Re-enacts provisions to impose a tax on employers in respect of certain wages
Harmonises these provisions with Victorian provisions
Significant changes to the 1971 Act include:
a payroll tax exemption is introduced for wages paid for adoption or maternity leave paid in addition to an employee’s normal leave
the method used to calculate the taxable value of fringe benefits is changed to restore payroll tax neutrality as between cash wages and fringe benefits
payroll tax exemptions for motor vehicle and accommodation allowances will be determined on the basis of rates applicable for income tax purposes rather than rates at which the allowances are payable under industrial awards
the payroll tax exemption for newly created non-profit organisations will only apply if the organisation has wholly charitable, benevolent, philanthropic or patriotic purposes and the person to whom the wages are payable is engaged exclusively in that kind of work
provisions for the treatment of contractor payments as wages are modified by:
removing the current general exemption for contracts at a rate of $800,000 or more per annum and
removing the exemption for amounts paid to financial planners by financial services licensees and
limiting the payroll tax exemption for contracts for the supply of services by a person who provides the services to the public generally by expressly requiring that the person provides the services to the public generally in that financial year
provision for the payroll taxing of employer contributions to industry portable long service leave and redundancy schemes is removed with effect from 1 July 2006
the payroll tax exemption for employment agents that on-hire staff to a client with wages below the $600,000 payroll tax-free threshold is removed
the Chief Commissioner's discretion to exclude an employer from a payroll tax employer group will be expanded to allow the exclusion of any member of the group except related corporations
payroll tax grouped employers will be required to nominate a designated group employer in order to obtain the benefit for the group of the $600,000 payroll tax-free threshold (instead of the nomination of a designated group employer being optional as at present)
the payroll tax exemption for apprentices, trainees and group apprenticeship/traineeship schemes is removed and replaced with a rebate scheme (with effect from 1 July 2008) but retained for group apprenticeship/traineeship schemes where the employer is a non-profit organisation
payroll tax will no longer be payable on trust distributions to beneficiaries who provide services but receive wages below the applicable award rate.
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