There are two types of payroll tax exemptions:
1) some or all of the wages paid by an organisation are exempt due to the nature of the organisation
2) some wages are exempt when paid for a specific purpose, eg maternity leave.
Type 1 exemptions
Type 2 exemptions
Type 1 exemptions
Wages are exempt if they are paid or payable by any of the following organisations, provided the wages are (a) only for work of a kind normally performed in connection with the religious, charitable, benevolent, philanthropic or patriotic purposes of the organisation, and (b) to a person engaged exclusively in that kind of work:
a religious institution
a public benevolent institution
a non-profit organisation whose objectives are solely or dominantly for charitable, benevolent, philanthropic or patriotic purposes (but not including a school, an educational institution, an educational company or an instrumentality of the State).
Continuation of existing exemptions
Religious institutions, public benevolent institutions, non-profit and charitable organisations that are, or would be exempt, under the Pay-roll Tax Act 1971 as at 30 June 2007 will continue to be subject to the provisions of that Act unless they alter their constitution in respect of their charitable or equivalent objects after 30 June 2007.
Education - schools and colleges
Wages are exempt if they are paid or payable by any private, non-profit school that provides education at the secondary level and below.
Wages paid to employees in NSW public schools, technical colleges or universities are not exempt.
Health care service providers
Wages are exempt if they are paid or payable for work of a kind normally performed in connection with the conduct of a health care service provider and to a person engaged exclusively in that kind of work.
A health care service provider is a public hospital or a non-profit private hospital.
Wages are exempt if they are paid or payable by the Crown for staff employed in an area health service, Home Care Service or the Ambulance Service of NSW.
Local and county councils
Wages are exempt if they are paid or payable by a council, or a county council.
The exemption does not apply to wages paid or payable for or in connection with:
1) the construction of any buildings or works, or the installation of plant, machinery or equipment for use in any of the undertakings referred to in (2).
2) the supply of electricity or gas, water supply, sewerage, liquefied petroleum or hydraulic power and the operation of abattoirs, public markets, parking stations, cemeteries or crematoria, hostels, coal mines, transport service, supply of building materials, or a prescribed activity.
Local government business entities
Wages are exempt if they are paid or payable by a wholly-owned subsidiary of a municipal council, and to a person for or in connection with an activity that is conducted for the council under a written arrangement between the subsidiary and the council.
Other government and international agencies
Wages are exempt if they are paid or payable by the Governor of a State, the Commonwealth War Graves Commission and the Australian-American Fulbright Commission.
Wages are exempt if they are paid or payable to official staff by a consular representative, non-diplomatic representatives or Trade Commissioner.
Type 2 Exemptions
Wages are exempt if they are paid or payable to Aboriginal persons employed under a Community Development Employment Project funded by the Department of Employment and Workplace Relations of the Commonwealth or the Torres Strait Regional Authority.
Maternity, paternity and adoption leave
Wages are exempt if they are paid or payable to an employee for 14 weeks full-time or an equivalent period of leave at a reduced rate of pay.
For example, the exemption may apply to wages paid or payable for maternity leave that extends to 28 weeks at half of the part-time rate of pay that would normally apply to the employee.
This exemption does not apply to wages paid or payable as annual leave, long service leave, sick leave or any part of wages paid or payable in respect of maternity, paternity or adoption leave that comprises fringe benefits. Medical records or a statutory declaration will be required for this exemption.
Volunteer fire fighters and emergency service volunteers
Wages are exempt if they are paid or payable to an employee for any time they are taking part or engaged in:
bushfire fighting activities as a volunteer officer or member of a brigade under the Rural Fires Act 1997
emergency operations as a volunteer member of an emergency services organisation under the State Emergency and Rescue Maintenance Act 1989.
The exemption does not apply to any form of paid leave, including recreation leave, annual leave, long service leave or sick leave.
Defence force personnel
Wages are exempt if they are paid or payable to any employees while they are on leave as a member of the Defence Force of the Commonwealth or the armed forces of any part of the Commonwealth of Nations.
Approved group apprenticeships and trainee schemes
Wages, including superannuation, allowances and fringe benefits, are exempt if they are paid to an employee who is employed in accordance with a non-profit group apprenticeship or traineeship scheme approved by the Department of Education and Training.