Monday to Friday:- 8:45am – 5:15pm (Brisbane Office)
Payroll Tax

Payroll Tax

Our Firm’s Practice Areas In Taxation Law Include:

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Medical and Allied Health Practices

Payroll tax for medical and allied health practices applies to employers with annual Australian taxable wages greater than $1.3 million. The position with respect to payroll tax on payments made directly to medical practitioners has recently changed, and many medical centers may now be required to pay payroll tax. Temporary relief under an amnesty scheme will continue to apply to eligible practices until 30 June 2025.

Despite the Queensland Revenue Office giving some guidance to the present treatment of payroll tax, it is presently unclear how it will treat payroll tax after 30 June 2025.

Common Law Employees

Payroll tax applies to wages paid or payable to common law employees. Common law employees is a phrase which covers most employees in a typical employment situation, but exceptions apply. Payroll tax is payable by a company where its total wage bill (including bonuses and allowances) exceeds $1.3 million per quarter.

Relevant Contract Provisions

In Queensland, relevant contracts can trigger payroll tax obligations even where there is no traditional employer-employee relationship.

Payments under contracts where one party supplies services, is supplied with services or resupplies goods, may be deemed wages and subject to payroll tax.

However, not all relevant contracts trigger tax, and exemptions exist for short-term contracts, subcontracting and where the services are not ordinarily required.

Employment Agents

The unique nature of employment agents’ work creates specific considerations for payroll tax, as employment agents become a person’s employer for payroll tax purposes when they are engaged to provide work for their client.

The employment agent is responsible for payment of payroll tax for wages, fringe benefits and super paid to a worker, even though they don’t receive the benefit of the work.

Limited exemptions exist, but are complex and failure to properly identify the party responsible for payroll tax can result in penalties.

Grouping and De-grouping

Companies may be grouped together for payroll tax purposes and treated as one unit for calculating and paying payroll tax, even if they operate separately. This usually occurs when companies are part of a related body corporate, they have common employees or a single controlling interest, or are part of a merged group after a merger or acquisition.

Grouping companies results in a reduced administrative burden and allows the companies to share deductions and liabilities within the group.

Companies may be de-grouped if they can demonstrate that they do not share significant resources or control with others and operate independently from other companies.

De-grouping allows for greater financial independence and operational independence, reducing the risk of being liable for the unpaid tax of other group members.

Grouping and de-grouping are complex matters with potential tax implications, and which require professional advice.

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