Be warned – we are experiencing an increased level of NSW payroll tax reviews & audits as the NSW Office of State Revenue ramps up action toÂ increase its revenue.
Payroll tax is 6% and applies to business with assessable wages above $626,000. Assessable wages includes gross employee wages, contractor payments, super and fringe benefits.
The biggest area business get caught out is with contractors.
Under the Payroll Tax Act 2007, the starting point is that all contractor payments are liable for payroll tax.Â They may then apply an exemption if applicable. There are 9 exemptions however none of the exemptions are simply – they are a legitimateÂ contractor .. or .. they are a proper company not a sole trader.. or ..Â they have theirÂ own insurancesÂ etc.Â If the contractor works mostly for you chances are they will be cuaght by the payroll tax net.Â Feel free to contact us forÂ further information and advice.