In general terms, payroll tax is a state levied tax imposed (primarily but not only on) the wages that an employer pays to its employees. Payroll tax is payable by the employer (not the employee) and calculated according to state based thresholds. In New South Wales, the payroll tax threshold for the period 1 July 2015 to 30 June 2016 is $750,000. The rate of tax payable from 1 July 2012 is 5.45%. The tax payable is based (primarily but not only upon) upon the total wages paid to employees during the month.
Payroll tax is often confused with ‘pay as you go tax’ or PAYG tax. PAYG withholding tax is a federal based tax that is paid by the employee, whereas payroll tax is a state based tax that is paid by the employer. Payroll tax is payable (primarily but not only on) on the total wages that are paid to employees. For the purposes of payroll tax, wages includes salary, allowances, superannuation contributions, fringe benefits, shares, options and certain contractor payments.
Under certain circumstances, an organisation may seek a determination or a ruling that it ought not be liable to pay payroll tax or otherwise may have valid grounds of objection to a payroll tax assessment imposed by the relevant State authority. For example, very often, State authorities purport to or seek to group companies or entities together and issue a payroll tax assessment upon a group of entities, seeking to treat the group of entities as one entity, for the purposes of payroll tax and seeking to impose the assessment upon a selected payer. We have sccessfully assisted clients in making applications for de-grouping, as well as seeking private rulings as to the correct amount of payroll tax payable (if any).
Similarly, in some cases, an organisation may be exempt from the payment of payroll tax. Generally, these organisations usually include public or non-profit hospitals, public benevolent institutions, religious institutions, non-profit non-government schools and charitable organisations.
If you are an employer and you fail to pay your payroll tax, this tax liability can be collected from:
- Directors, or former Directors;
- Any members of employer entity; and
- A principal contractor who was obliged to pay payroll tax in respect of its sub-contractors.
If you fail to make your payroll tax payments within the specified time period, interest and penalties can be applied to the amount of tax that is owed.
At Navado, our experienced team of Sydney payroll tax lawyers can assist you with your payroll tax enquiries. Our tax lawyers can assist you with:
- Understanding your payroll tax obligations;
- Grouping and payroll tax grouping matters;
- Seeking private rulings in relation to payroll tax matters;
- Making de-grouping submissions regarding payroll tax matters;
- Liaising with the Office of State Revenue, in relation to payroll tax matters;
- Calculating the amount of payroll tax you have to pay;
- Lodging an objection to a payroll tax assessment;
- Making a voluntary disclosure in relation to your payroll tax; and
- General tax legal advice in relation to payroll tax.
To speak with one of our payroll tax lawyers, please contact our firm by telephone on (02) 9233 4048 or send an email to firstname.lastname@example.org to arrange a consultation.
This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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