Labour content of contracts
All of the payments made by the hiring business for the services of the contractor are deemed to be wages. This includes any fringe benefits, superannuation contributions and termination payments. The GST component of a contract is not liable. The hiring business is deemed to be the liable employer.
When payments are made to a company, trust or partnership, which in turn pays them to the individual worker, only the hiring business is liable for the tax. When a relevant contract includes payment for materials provided by the worker which are not separately invoiced the Chief Commissioner accepts the following labour contents apply as long as the worker clearly provided the materials.
In situations where the materials are provided by the hiring business the labour contents do not apply. The table contains trades and percentage of labour content.
| Trade | Labour content |
|---|---|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The rates listed here have been agreed to by the Master Builders Association of NSW, the NSW Division of the Housing Industry Association and other representative associations. You will need to enclose relevant details when you lodge your payroll tax return if you believe a lesser percentage applies to labour in your contract, or you consider an allowance should be made for a trade not listed in the above table.
