webinar 1: understanding the basics what it is, how it works · 2015-07-14 · webinar 1:...
TRANSCRIPT
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Webinar 1:
Understanding the basics –what it is, how it works
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Payroll Tax Webinars
Webinar One Understanding the basics –what it is, how it works
Webinar Two Allowances, FBT, exemptionsand rebates
Webinar Three Contractors
Webinar Four Groupings
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Agenda
• What is payroll tax?
– Thresholds and rates
• What is taxable?
• Exclusion and exempt employers
• Interstate (and overseas) workers
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Payroll Tax in a Nutshell
• Self assessed tax paid monthly
• Apportioned tax free threshold amount for part year/interstate employers
• Harmonised legislation
• Employees or ‘deemed employees’
• Liable employers are required to apply for registration
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Tax Free Threshold – 2015-16
NSW SA VIC QLD
$750,000 $600,000 $550,000 $1,100,000*
NT TAS WA ACT
$1,500,000* $1,250,000 $800,000* $1,850,000
Liability in a state exists if:
1. Services are performed wholly in that state; and2. Australia wide wages exceeds threshold
* Note: reduces as wages increase
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Tax Free Threshold
Employing for full financial year
Employing for half financial year
Employing for three quarters of
financial year
Receive full tax free
threshold
Receive ¾ tax free threshold
Receive half tax free threshold
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Tax Free Threshold
Vic $600,000
SA
$300,000
Tas $600,000
Total Australian Wages $1,500,000AdjustedTasmanianTax Free Threshold:
$600,000
X $1,250,000$1,500,000
= $500,000
AdjustedVictorian Tax Free Threshold:
$600,000
X $550,000$1,500,000
= $220,000
Adjusted South Australian Tax Free Threshold:
$300,000
X $600,000$1,500,000
= $120,000
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Payroll Tax Rates – 2015-16
NSW SA VIC QLD
5.45% 4.95% 4.85% 4.75%
NT TAS WA ACT
5.5% 6.1% 5.5% 6.85%
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What is Taxable?
Liable Wages
Salaries & Allowances
Apprentice payments
(not all jurisdictions)
Leave
Super, bonuses &
commissions
Fringe benefits
Termination payments
Shares & Options, & Directors
Fees
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Apprentices
SA NSW TAS VIC
Taxable Taxable# Taxable# Taxable#
QLD NT WA ACT
Exempt# Taxable# Exempt# Taxable (1st year)
#Be mindful that some conditions apply – contact relevant revenue
office for more information
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Leave Payments
Leave payments are taxable
Annual leave
Sick leave
Long service leave
Leave loading Maternity and adoption leave are not taxable
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Director’s Fees
Director’s Fees are taxable
Profit Distribution
Non-working Directors
Regardless of where paid to
Working Directors
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Shares & Options
Value of shares or options on ‘the relevant day’ LESS any consideration paid by employee
Grant Date Vesting Date
Market value or amount determined by Income Tax Assessment Act 1997
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Superannuation Contributions
All pre-tax superannuation contributions are taxable
EmployeesDeemed
employeesCompany directors
SGCamounts
>SGC amounts
Salary sacrifice
Top-up contributions
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Termination Payments
Taxable
All leave paid on termination
Director termination
Contractor termination
Income tax free components of a genuine redundancyOR early retirement scheme
Employee termination payments
Pay in lieu
Contract payouts
Golden handshakes
Severance payments
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Exclusions
Fire & Emergency Services Duty Some conditions may vary
between states and territories –please check for finer details with
the relevant revenue officeWorker’s Compensation
Maternity & Adoption Leave
Defence Force Reserves Duty
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Exempt Employers
PBI & charitable
organisations*
Public hospitals
Non-profit private
hospitals
Non-profit private schools
Government – local**, Governors and foreign representatives staff
In some states you need to apply for an exemptionCheck with the relevant revenue office
*exemption criteria applies to charitable organisations in the Northern Territory, Victoria and Western Australia**not available in Tasmania
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Where are Wages Taxable?
If the work is performed solely
in one jurisdiction in a month
Wages taxable in that jurisdiction
General Rule
An area of confusion with payroll tax is how to treat wages paid to workers who work in other states/territories or overseas
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Interstate Workers
The work is performed in
more than one state/territory
(and/or overseas) in a month
Wages are taxable where
The employee’s principal place of residence is located
The employer’s business is registered
1
2
If no principal place of residence then
If employer’s business is not registered in Australia or does not have a
principal place of business (PPR) then
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Interstate Workers
The work is performed in
more than one state/territory
(and/or overseas) in a month
Wages are taxable where
The bank account the employee’s wages are paid into
Where the work is predominately performed
3
4
If not paid into an Australian bank account then
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Overseas Workers
Employees working overseas
> 6 months: exempt
< 6 months: where paid?
Employees from overseas
Work performed only in one state
Liable in that state
Work performed in more than one state
Test 2 to 4 applies
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Payroll Tax Webinars
Webinar One Understanding the basics –what it is, how it works
Webinar Two Allowances, FBT, exemptionsand rebates
Webinar Three Contractors
Webinar Four Groupings
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Further information
payrolltax.gov.au
NSW SA VIC QLDosr.nsw.gov.au1300 139 815
revenuesa.sa.gov.au08 8204 9880
sro.vic.gov.au13 21 61
osr.qld.gov.au1300 300 734
NT TAS WA ACTtreasury.nt.gov.au
1300 305 353sro.tas.gov.au03 6166 4400
osr.wa.gov.au08 9262 1300
revenue.act.gov.au02 6207 0079