Payroll Tax Obligations

If you are an employer you may be liable for Payroll Tax. Payroll Tax is a state administered tax, which in NSW is administered by the Office of State Revenue (OSR). The information below relates to the tax administered in NSW. Thresholds can be located at  NSW payroll tax rates and thresholds. 

In assessing if an employer has exceeded the threshold mentioned above, the following needs to be taken into account:

• Salaries and Wages including bonuses, commissions and directors fees
• Fringes Benefits tax able under the Fringe benefits Tax regime.
• Employment Termination Payments
• Employment contributions to share purchases
• Make up pay for Workers Compensation claimants
• Most allowances, however there are some exempt allowances
• Superannuation Contributions made on behalf of an employee
• Certain contractor payments

Being a State based tax the intention is to levy the tax on wages paid by NSW companies within that state, to employees employed in NSW. However there are special rules were an employee is working outside NSW but the employer is from NSW, and were the employee is working in NSW and the employer is from outside of NSW. There are also rules that enable the OSR to combine the wages of various entities together.

Payroll tax is required to be remitted on a monthly basis within 7 days after the end of the month, and is assessed by calculating the wages and determining if it exceeds the monthly equivalent of the annual threshold

At the end of each financial year an Annual Reconciliation form is required to be prepared and lodged within 21 days after the end of the year. With lodgment of this form any shortfall is paid or overpayment is refunded.

At Bentleys we are able to assist you with information to determine if your business is in a position to be liable for Payroll Tax, and if you are then we can assist you in the calculation of the tax, taking into account any exempt amounts.