OSR Return ID Identifier Fringe Benefits Fringe Benefits Wages are defined to include any fringe benefits provided to employees. For the purpose of the Payroll Tax Act 2008, a fringe benefit means a fringe benefit under the Fringe Benefits Tax Assessment Act 1986 but does not include: a. a tax-exempt body entertainment fringe benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986; or b. any payment or benefit that may be prescribed by regulation under the Payroll Tax Act 2008 not to be a fringe benefit (section 2(1) of the Payroll Tax Act 2008). The Fringe Benefits Tax Assessment Act 1986, is referred to as the "FBT legislation" for the remainder of this help file. Note: The definition of wages has always included payment for services "whether paid or payable in cash or in kind." Non cash remuneration - Fringe Benefit Where a benefit is provided, the value for payroll tax purposes from 1 July 2008 should be calculated by using the lower grossed up rate (prior to 1 July 2008 the payroll taxable fringe benefits amount is the total of the grossed-up Type 1 and Type 2 benefits). For example: Type 1 aggregate fringe benefits amount: $2 000 Type 2 aggregate fringe benefits amount: $3 000 Total Type 1 & 2 aggregate fringe benefits amount (pre-grossed): $5 000 Fringe Benefits Taxable Value for payroll tax purposes: $5 000 x 1.8692 = $9 345 Therefore you need to maintain working papers that show how you have determined your payroll tax liability. Whenever a change occurs to FBT legislation, the amendments will automatically apply to the Payroll Tax Act 2008 for the purposes of calculating payroll tax. Inclusion of the value of Fringe Benefits in monthly returns You must include in monthly returns the tax calculated on the actual benefits provided. However, where it is not practical to calculate the value of the fringe benefits, the Commissioner has the discretion to accept an estimate of the value of those benefits. A reasonable estimate would be 1/12th of the value of the benefits declared on your latest Fringe Benefit Tax Return (FBT Return). Where you use the reasonable estimate basis for monthly returns, the return for the month of June (Annual Reconciliation Return) in that financial year must include the value of benefits declared on the FBT Return for the Fringe Benefits Tax year ending 31 March of that year. For example: If you include $1 000 (March 2007 FBT Return $12 000 / 12) in each monthly return and the FBT Return for March 2008 is for $24 000, the employer will include the balance of the $24 000 in the June return (i.e. $24 000 - (11 x $1 000) = $13 000). Tax on that balance of $24 000 (adjusted for tax paid on $1 000 per month) will be paid with the June return. The estimate to be included in the monthly returns for the next financial year will be increased to $2 000 per month (March 2008 for FBT Return $24 000 / 12). Fringe Benefits Tax returns: FBT year ended 31 March 2007 - Taxable value: $12 000 FBT year ended 31 March 2008 - Taxable value: $24 000 Payroll tax returns for the year ended 30 June 2008 June 2007 to May 2008 ($1 000 p/month) $11 000 June 2008 Annual Adjustment Return $13 000 Total returned for the 2008 financial year $24 000 Part year employers If you cease to be an employer during a financial year, you must include in the final payroll tax return the actual amount of fringe benefits provided during the period of employment. You may include the tax payable on the actual value of benefits or a reasonable estimate of that value in monthly payroll tax returns. Exemptions The definition of a 'fringe benefit' does not include: a. a tax-exempt body entertainment fringe benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986; or b. any payment or benefit that may be prescribed by regulation under the Payroll Tax Act 2008 not to be a fringe benefit (section 2(1) of the Payroll Tax Act 2008). Exempt fringe benefits or fringe benefits with a nil taxable value will not be subject to payroll tax, as they will have a nil value for payroll tax purposes. Component of wages covered by two or more subsections of wages definition Where a component of wages is covered by two or more subsections of the wages definition, it should only be included once in the calculation of total wages. This situation may happen with fringe benefits where the benefit may fit the definition of wages, as a fringe benefit, or as wages paid in kind. In such cases the value for payroll tax purposes is the value determined in accordance with the FBT legislation. Australian Taxation Office Fringe Benefits Tax Rulings In order to follow as closely as possible the effect of the Fringe Benefits Tax legislation, the Commissioner will adopt the rulings issued by the Commonwealth Commissioner of Taxation. This will apply to all rulings relating to fringe benefits that are effective as at 1 August 1990 and all rulings issued after that date. Audits by Australian Taxation Office Should an audit by the Australian Taxation Office (ATO) result in an amended Fringe Benefits Tax assessment, another return for the month of June for the same financial year as amended by the ATO, should immediately be lodged with the State Revenue Office and monthly returns adjusted accordingly. https://www.tro.tas.gov.au/help/0589.html Salaries and Wages If you are lodging a nil return, this must have a zero value Contractors/Consultants What contractor payments are taxable? Many businesses use contractors. The payments made to these contractors may be liable for payroll tax. To determine whether the contractor provisions apply to you, you firstly need to determine whether the person performing the work for you is an employee or a contractor. If the person is a contractor, the relevant contractor provisions apply. Employee or contractor? As a guide, if the answer for most of the following questions is "yes" the payment will be regarded as having been made to an employee: * Is the entity receiving the services (i.e. you) able to instruct the worker on how to do the work, or control how the worker does the work? * Is the worker called an 'employee' and/or there is an agreement for employment or appointment to staff? * Are there other workers doing the same job who are treated as employees? * Are there certain hours that must be worked (as opposed to contracting for a result)? * Is there continuous provision of the services, regardless of what work there is to do? * Is the worker paid regularly or periodically (not on a per job or a results basis)? * Does the entity receiving the service (i.e. you) supply the materials, equipment and tools to the worker performing the work? * Does the entity receiving the services (i.e. you) pay PAYG income tax, sick leave, holiday pay, superannuation, workers compensation or other benefits to the worker (for example; on the basis of the period worked)? * Are the services being provided essential for the business to produce its outputs (as opposed, for example; to services supplied for repairs to a single delivery vehicle)? Where the answers to the above questions are mainly "no," the relationship between the parties is more likely to be one of principal and contractor. In these circumstances payments for these services under the contract are subject to payroll tax and remain so unless one of the relevant contractor exemptions apply. If any one of the exemptions is met, then the payment is not subject to payroll tax. If the answers to the questions are mainly "yes," the relationship between the parties is more likely to be one of employer and employee. In these circumstances payment for the services are subject to payroll tax as wages. The important distinction between the two is that if there is a principal-contractor relationship, certain exclusions (i.e. they are not exemptions) apply which do not apply when the worker is an employee. Relevant contractor provisions The purpose of the relevant contractor provisions is to apply the Payroll Tax Act 2008 to an arrangement where a contractor or sub-contractor works exclusively or primarily for one employer and where the object of the contract between the parties is to obtain the labour or services of the contractor or sub-contractor. Payroll tax is payable on the labour content of any remuneration only. Payments with respect to the labour content of relevant contracts will be subject to payroll tax whether or not the person supplying the services, or labour, does so as a natural person or through a company, a trustee (incorporated or unincorporated) or a partnership. In general terms, where a contract is a relevant contract, the contractor will be deemed to be an "employee" and payments under the contract will be "wages." The person who pays for the labour will be an "employer" and, subject to the normal payroll tax exemption level, will be liable to pay payroll tax in respect of those wages. Certain categories of contracts are excluded from the definition of "relevant contract" and hence are not considered for the purposes of payroll tax. Managers and any other persons responsible for the engagement of labour (either by way of employees or contractors or both) should acquaint themselves with the legislation and the details contained in this help file. Penalties apply for failure to include all relevant information for the purposes of calculating a payroll tax liability. What is a relevant contract? The legislation provides that, subject to the payroll tax threshold, tax will be levied on payments made for services provided under a "relevant contract." Section 32 of the Payroll Tax Act 2008 provides a very wide definition of a relevant contract, but then lists a number of exclusions. Relevant contracts (subject to the exclusions referred to below), are those where a person, in the course of carrying on a business: i. supplies services to another person for or in relation to the performance of work; or ii. receives services from another person for or in relation to the performance of work; or iii. gives out goods to natural persons who perform work and re-supply the goods. This includes the practice of giving out goods to "outworkers" or "home workers." What is an exempt contract? It should be noted that only one of the following provisions has to be satisfied to render the contract exempt. Contracts where the supply of a person's labour is ancillary to the supply of goods or the use of goods which are owned by the person (section 32(2)(a)) of the Payroll Tax Act 2008) This exemption recognises that there are circumstances in which a contractor may provide labour in supplying goods or the use of goods, but the supply of goods is the fundamental object of the contract. The associated labour is ancillary to the contract itself. An example of this situation would be where a person contracts to supply and install an air-conditioning system. In this case, the associated labour is ancillary to the contract itself. Contracts for services not ordinarily required by the employer and provided by a person who performed such services of a similar kind to the public generally in the same year (section 32(2)(b)(i) of the Payroll Tax Act 2008) There are two parts to this exemption. The first looks at the business or "taxpayer" and relies on answers to the following questions: * what is the principal activity of the business?; and * is this service normally required? The second examines the contractor hired by the taxpayer and relies on answers to the following questions: * does the contractor provide services to others?; and * has this service been provided to other entities in the same financial year? For the exemption to apply, both parts must be satisfied. This exemption recognises that many transactions are contracts for service that are not part of the mainstream of a person's business (that is, they are not normally required by the business in an ongoing sense) and applies where persons who are bona fide providing services to other businesses and the public generally perform work of this type. For example: Where a small retailer engaged a shopfitter to refit the interior of his or her premises, this would not be a regular requirement of the retailer's business. The exemption test would be satisfied if the shopfitter has provided services to anyone else generally during that year. Conversely, where a large chain store engages a shop fitter permanently or on contract or by way of a series of contracts, because the scale of its operations require ongoing shop fitting in various stores, payment for the shopfitter's services would be liable to payroll tax. Contracts where services are performed by one contractor on no more than, in the aggregate, 90 days in the financial year (section 32(2)(b)(iii) of the Payroll Tax Act 2008) This provision exempts payments to persons who are generally employed for a short term by the same employer in one financial year. However, if the contractor or sub-contractor performs similar services for the same employer under a different contract arrangement, the total days worked by the contractor or sub-contractor, regardless of whether the work is performed under one contract or arrangement or a number, must be included in counting the total days worked. For example: If a person contracts a 'concreter' in the first instance and the same person as a 'cement mixer operator' in the second, but the person is providing the same services, then both terms of services must be included; or If "A Pty Ltd" provides services and "B Pty Ltd" provides similar services, and the persons actually performing the work are the same, then these periods must be aggregated. Where a person has performed services for 80 days only, the contract is not relevant at that point. However, if a further 11 days is performed by the same person later in the year, the contract becomes relevant and payroll tax is payable on payments relating to the full 91 days, that is, liability goes back to day one. In these circumstances employers are only required to pay the payroll tax at the point when 90 days is exceeded and not amend previous monthly returns. The word "days" refers to the number of days on which work is performed. The number of hours worked each day is not relevant. Thus if only two hours are worked on one day then this must still be counted as a "day." Contracts for services normally required by an employer for less than 180 days in the year (section 32(2)(b)(ii) of the Payroll Tax Act 2008) This provision recognises that businesses require various ad hoc services allied to the main stream of work, but so infrequently that permanent employees are not engaged. The requirements of the business are crucial to part of the exemption. For example: A contract fruit picker may work in excess of 90 days, but as the employer does not normally engage fruit pickers for more than 180 days in the financial year (that is, does not require the fruit picking service for more than 180 days), the contract would not be liable for payroll tax. If, on the other hand, the service is provided for more than 180 days, it is not ad hoc and payroll tax is applicable. Prior to 1 July 2008, contracts where payments were made at a rate exceeding $500 000 per annum was deemed to be an excluded contract. Effective 1 July 2008, the above exclusion was removed from the Payroll Tax Act 2008. Contracts where the Commissioner is satisfied that the services are provided by a person who has provided services to the public generally in the same financial year (section 32(2)(b)(iv) of the Payroll Tax Act 2008) This exemption allows for anomalous cases, not intended to be caught by the legislation. In order to rely on this exemption, the employer must apply to the Commissioner for a determination. An application for exemption under this provision may be granted if it can be demonstrated to the Commissioner that the contractor: * regularly conducts an independent trade or business; and * has been consistently performing such services to a wide range of clients in the same financial year. Contracts where the person, who contracts to provide services, engages labour to perform those services (section 32(2)(c) of the Payroll Tax Act 2008). Contracts will not be considered relevant contracts where: 1. the party who contracts to provide the services, including a corporation and or partnership, engages two or more persons to perform the actual work under the contract; or 2. the party who contracts to provide the services is a partnership of natural persons and the work is performed by one or more partners plus one or more persons engaged by the partnership to perform the actual work required under the contract; or 3. the party who contracts to provide the services is a natural person and that person, together with at least one other person engaged by him performs the actual work required by the contract. : In all cases, the person engaged must perform the work that is the object of the contract. It would not be sufficient for say, a spouse, who performs purely clerical work, to satisfy the exemption provisions, as he or she would not be engaged in the work to which the contract relates. This exemption will not apply where the Commissioner determines that any part of the arrangement was entered into with the intention of avoiding the payment of tax. Allowances for equipment and material costs Payroll tax is only imposed on the labour portion of any contract for the performance of work. Where a contract does not distinguish between labour and other costs, the Commissioner will accept, without verification, the following percentage deductions as an allowance for materials: Trade Deduction allowable without verification Architects 5% Blind Fitters 25% Bricklayers 30% Building Supervisors 25% Cabinet Makers 25% Carpenters 25% Carpet Layers 25% Draft persons 5% Electricians 25% Engineers 5% Fencers 25% Kitchen Fixers 30% Painters 30% (if the painters provide the paint) Plumbers 25% Resilient Floor Layers 37% Roof Tilers 25% Tree Fellers 25% Vinyl Layers 37% These percentages have been arrived at following considerable consultation with industry sources and the Revenue Offices in both New South Wales and Victoria. Should you maintain that a lesser percentage applies to labour in a particular contract, details should be submitted for consideration at the time your payroll tax return is lodged. Similarly, if you maintain that an allowance should be made for a trade not listed above, then details should be submitted with the appropriate return. https://www.tro.tas.gov.au/help/0581.html Director Fees Directors' remuneration Payments made which amount to director's remuneration are liable for payroll tax. Directors' remuneration includes directors' fees, board fees and allowances. This is the case for both executive and non-executive directors https://www.tro.tas.gov.au/help/0595.html Termination Payments Shares/Options Other Taxable Payroll Superannuation Employer superannuation contributions Payroll tax is payable on superannuation contributions made by an employer. Payments classed as taxable superannuation contributions by the Payroll Tax Act 2008 include: * employer contributions made to a superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993; * employer contributions which are a superannuation guarantee charge within the meaning of the Superannuation Guarantee (Administration) Act 1992; * employer contributions to the Superannuation Holding Accounts Special Account; * employer contributions to a retirement savings account within the meaning of the Retirement Savings Account Act 1997. * employer contributions to the Retirement Benefits Fund scheme established under the Retirement Benefits Act 1993; * employer contributions (including top-up contributions) to any other form of superannuation fund or scheme including contributions to or in relation to unfunded or partly funded superannuation schemes where the contributions are in respect of employees' service on or after 1 July 1997; * employer contributions for company directors to any superannuation fund; and * the value of non-monetary contributions, made on behalf of an employee, to a superannuation fund. Note also that taxable superannuation benefits will include: * benefits to both employees and deemed employees (for example, certain contractors). Please refer to the section on "Relevant Contractor Provisions" for details on situations where contractors may be deemed to be employees; and * all payments made in respect of services performed by employees or deemed employees. Inclusion of superannuation benefits in returns Employer superannuation contributions in respect of services provided on or after 1 July 1997 should be included in payroll tax returns at the time you actually pay the contributions to the superannuation fund, except in the case of your employer contributions to a Retirement Benefits Fund scheme under the Retirement Benefits Act 1993. Payroll tax is calculated on contributions to a Retirement Benefits Fund by the following methods: * in the case of an employee to whom Part 4 of the Retirements Benefits Regulations 1994 applies and who is employed by a Government Business Enterprise or a State authority, by multiplying the wages of the employee by the average new entrant contribution rate; * in the case of any other employee to whom Part 4 of the Retirement Benefits Regulations 1994 applies, by multiplying the wages of the employee by 11 per cent or such other rate that may be determined by the Treasurer from time to time; and * in the case of an employee to whom Part 5 of the Retirement Benefits Regulations 1994 applies, by multiplying the wages of an employee by the minimum employer contributions rate specified in the Superannuation Guarantee (Administration) Act 1992. A contribution holiday Where a fund is on a "contribution holiday" and no employer contributions are being made to the fund, no payroll tax is payable. However, where salary has been sacrificed to a fund on a contribution holiday and no employer contributions were made to that fund, the salary-sacrificed wages must be included for payroll tax purposes. https://www.tro.tas.gov.au/help/0593.html Commissions/Bonuses Allowances Allowances and Reimbursements All allowances paid are taxable in full with the following 2 exceptions: * they represent a direct and equal reimbursement of employment related expenditure; or * a statutory exemption has been made. Reimbursement of expenses A reimbursement is not an allowance. For a payment to be considered a reimbursement, it must have the following characteristics: * be incurred by an employee in the course of your business; * be a precise amount whether this be a pre-payment or reimbursement; which is * fully covered by receipts. If a payment does not have all three characteristics, then it is not a reimbursement and will usually be taxed in full. Allowances covered by statutory exemption The only exemptions to the general rule that allowances are taxable in full are: * Accommodation allowances; and * Motor vehicle allowances. Accommodation allowances An accommodation allowance paid to an employee in respect of a nights' absence from their usual place of residence is not considered as wages where it is less than or equal to the "exemption rate." Any amount paid in excess of the "exemption rate" is taxable as wages. The "exemption rate" is calculated with reference to Australian Taxation Office rates for reasonable daily travel allowance expenses using the lowest capital city for the lowest salary band for the year ending 30 June 2008. Motor vehicle allowances Motor vehicle allowance paid to compensate employees for undertaking work related travel using their own private motor vehicle is not considered as wages where it is calculated on a rate per kilometre that is less than or equal to the "exemption rate" per kilometre. Any amount paid in excess of the "exemption rate" per kilometre is taxable as wages. The number of work related kilometres travelled is calculated with reference to either the "Continuous Recording Method" (actual number of kilometres travelled during the financial year) or "Averaging Method" (number of business kilometres travelled during a 12-week period recorded in a log book that can be used over the next succeeding four financial years after the first financial year). The "exemption rate" is the largest motor vehicle rate as prescribed by the Australian Taxation Office using the "Cents Per Kilometre Method" for the year ending 30 June. https://www.tro.tas.gov.au/help/0598.html Total taxable Interstate wages paid by other group members Total Interstate Wages Total taxable wages paid by other group members in Return State Payroll Tax Assessed Electronic Payment Authority PTMRTASLodgeRequest [Abstract] ReportingParty TAS Primary Items [Abstract] ReportingParty TAS NSP Primary Items [Abstract]