Payroll Tax
The payroll tax regimes throughout Australia are constantly changing both through legislative amendments and case law requiring ongoing vigilance rather than a ‘set and forget’ mindset.
Payroll Tax
The payroll tax regimes throughout Australia are constantly changing both through legislative amendments and case law requiring ongoing vigilance rather than a ‘set and forget’ mindset.
Payroll tax is imposed by each State and Territory of Australia on the total taxable wages paid or payable by employers to employees (including certain contractors). While payroll tax is a State based tax, consideration of an employer’s Australia wide operations and taxable wages is necessary.
Often decisions about payroll tax, or the data that forms the base used to prepare payroll tax returns, are made outside of an entity's tax or finance team leading to potential risks of incorrect self-assessment and reporting. Compounding this issue is the obligation to lodge annual payroll tax reconciliations in July which coincides with the already busy year-end period.
TLS Australia assists employers from all industries to meet their payroll tax obligations across all Australian States and Territories. We can assist with all aspects of the payroll tax continuum from early-stage preparation and ensuring you are correctly classifying payroll accounts/codes during the year, to preparing and lodging end of year returns, right through to assisting with unexpected audits and objections.
In addition to our compliance role, TLS Australia is a leading indirect tax litigation practice whose founder has successfully represented multiple clients in tribunals and Courts across Australia. This provides our clients with the unique benefit of an advisor that is abreast of the ongoing technical and practical changes for payroll tax as it happens.
Our Services
Australian Payroll Tax Rates
The payroll tax rates and thresholds for each jurisdiction from 1 July 2024 are:
Jurisdiction
Australian Capital Territory
New South Wales
Northern Territory
Queensland
South Australia
Tasmania
Victoria
Western Australia
Payroll Tax Rate
6.85%
5.45%
5.5%
4.75% or 4.95%
0% - 4.95%
4% or 6.1%
4.85%
5.5%
Threshold
$2,000,000
$1,200,000
$1,500,000
$1,300,000
$1,500,000
$1,250,000
$900,000
$1,000,000
Additional Levies
0.25%-0.5%
N/A
N/A
0.25%-0.75%
N/A
1%
N/A
N/A
Rates, Levies and Thresholds can change depending on Australian wide wages, group membership and regional status.
Australian Payroll Tax Rates
The payroll tax rates and thresholds for each jurisdiction from 1 July 2024:
PRT Rate
6.85%
5.45%
5.5%
4.75% - 4.95%
0% - 4.95%
4% - 6.1%
4.85%
5.5%
Threshold
$2,000,000
$1,200,000
$1,500,000
$1,300,000
$1,500,000
$1,250,000
$900,000
$1,000,000
Rates, Levies and Thresholds can change depending on Australian wide wages, group membership and regional status.
Considering your payroll tax requirements in year and as your business grows and evolves will ensure you have peace of mind come annual return time in July each year. We work with a broad range of companies either on a monthly basis or as and when changes are made (for example acquisition or divestment), to provide real-time compliance. This substantially reduces the cost and time commitment for internal finance personnel allowing employers to focus and dedicate resources to key aspects of the business.
Monthly Payroll Tax Compliance
We can work with you to manage your monthly payroll tax compliance process by offering an “end to end” solution which includes the following services:
· Undertaking a detailed review of the payroll related information required to complete the monthly payroll tax return
· Completing the monthly payroll tax calculation worksheets and supporting documentation
· Calculating the taxable wages and ascertaining the payroll tax liability
· Identifying any payroll tax exemptions or concessions available
· Reviewing external contractor payments for the purposes of identifying those which form part of taxable wages
· Undertaking the necessary compliance checks and reconciliations for accuracy
· Preparing and lodging the monthly returns
· Providing the supporting documentation, lodgement confirmation and payment details following lodgement
· Providing the lodgement documentation for each month at the end of the financial year
STRATEGIC PAYROLL TAX PLANNING AND ADVICE
We can provide tailored advice on specific payroll tax considerations for your business, including:
· Review of new acquisition entities and understanding alignment of payroll accounts/codes with existing classifications and treatment
· Historic review of payroll tax compliance during due diligence and post-acquisition
· Grouping considerations for changes to company ownership and control and grouping exclusion applications
· Divestment and closure of payroll tax entities
· Proactive lodgement of applications for rulings to resolve uncertainty relating to payroll tax matters for your business
Early-stage advice and compliance
You wouldn't lodge your Income Tax Return without seeking the proper advice so why would you lodge your Payroll Tax Annual Returns without following due process and seeking the necessary specialist advice to ensure you return is correct.
By 21 or 28 July each year, most employers are required to lodge an annual payroll tax return in each Australian State or Territory in which they employ. This process allows businesses to reconcile their annual information with the monthly payroll tax returns lodged throughout the financial year. To the extent that an overpayment or underpayment is identified, this presents an opportunity to remedy it in an efficient manner.
TLS Australia assists employers to conduct annual compliance reviews and prepare the necessary returns and audit documentation, including facilitating end of year payments. Not only does this provide an extra pair of hands at financial year end, it also ensures that any mistakes made during monthly returns are corrected and broader exemptions and Australian wages are considered and included correctly.
Annual PAYROLL TAX Return LODGEMENTS
Our expert team can manage the annual reconciliation and return process by offering the following key services:
· Reviewing all monthly payroll tax returns lodged during the year to ascertain the “taxable wages” declared and tax paid
· Analysing payroll codes to identify all “taxable wages” and classify them appropriately for payroll tax purposes
· Reviewing the employer’s broader employee payments and benefits to identify “taxable wages” for payroll tax purposes
· Reviewing contractor payments and identifying all "taxable wages" for payroll tax purposes
· Ensuring that all payroll tax exemptions or concessions have been fully claimed
· Providing assistance with lodging the annual payroll tax return for each applicable jurisdiction ensuring the correct figures are lodged
· Providing audit ready documentation to support the annual return
To the extent that any systematic issues are identified, we can assist with obtaining a refund or making a voluntary disclosure for prior financial years.
Annual ReturnS
With increased information flow between Federal and State authorities and substantial harmonisation across the States and Territories, increased compliance activities are commonplace. This is especially the case for companies who engage contractors and are reporting payments to contractors through other processes and platforms as well as companies that are considered grouped from a payroll tax perspective.
Often these compliance activities land when timing is not ideal and can leave you asking, “how do we resolve this quickly and efficiently?”.
TLS Australia has established strong working relationships with the Revenue Offices in every State and Territory to simplify and expedite the resolution of compliance activities for Australian employers.
Our approach is to work with you to:
· Explain what is happening in non-tax terms
· Explain what it means for your business
· Simplify what needs to be done to resolve the matter
· Work with you and the Revenue Offices to quickly and efficiently resolve the matter at hand
We also take a proactive approach to leveraging lessons learnt during the review and ensuring that any systemic issues identified are dealt with for prior financial years that also remain open for amendment. This can mean either obtaining prior year refunds or making voluntary disclosures where required.
revenue office reviews and audits
Some tax matters are more complex than others and, as a result, require further due process to gain resolution.
As a registered legal practice, we can help you to manage your tax controversy matters in court where this is your best option for resolution. We have experience in dispute resolution, negotiated outcomes, tribunal applications and litigation for all indirect taxes.
In our experience, involving legal practitioners in tax controversy matters from first contact with the relevant tax authority optimises information disclosure, streamlines processes, improves the breadth and consistency of submissions and improves the collation of evidence to support positions adopted.
If you have a tax controversy matter in any of our specialist tax areas, please reach out for an initial discussion as to the options available to you for resolution.
litigation
The benefits of engaging the experts
In our experience, the benefits of engaging an expert to assist with your payroll tax obligations are vast and can include:
· Accuracy of payroll tax return lodgements - no large end of year tax liabilities
· All applicable exemptions and concessions are claimed
· Independence to ensure a more robust and objective view that can assist to identify systemic issues
· Real time classification of new payroll codes
· Audit ready documentation prepared in year and at year end
Employers that engage a professional advisor are seen more favourably by the revenue authorities as taking a prudential approach to their payroll tax obligations. It also ensures the right people are focussing on the right tasks and your internal teams can focus on their day jobs.
Reach out today for an initial conversation
Payroll Tax
The payroll tax regimes throughout Australia are constantly changing both through legislative amendments and case law requiring ongoing vigilance rather than a ‘set and forget’ mindset.