Payroll tax is a state and territory tax. It is assessed where total Australian taxable wages paid or payable to employees by an employer exceed specific thresholds. The tax is self-assessed and as such the obligation falls to employers to ensure they are aware of their total wage bill across Australian states and territories and whether those are taxable.

In this is Part 2 in a series of articles by our State Tax Team we examine how and when payroll tax is payable on directors’ fees. Payroll tax is a state-based tax imposed on a business where taxable wages exceed relevant state or territory thresholds.

It is common for many shareholders to also be workers and/or employees of a business. However, as a general rule, payments made to the persons in their capacity as shareholders are not subject to payroll tax.

Where services are performed wholly in one Australian jurisdiction, payroll tax will be payable in that jurisdiction. For example Aaron is a receptionist and fully performs his job at an office in regional Victoria. His employer qualifies for payroll tax being charged at the regional rate, Aaron’s wages will be payable in Victoria at regional rates.

Thousands of businesses across regional Victoria have already taken advantage of the Victorian Government’s regional payroll tax cuts, which have saved businesses more than $31 million in the first financial year it was introduced.

In CCSR v Benidorm Pty Ltd [2020] NSWCA 285, the NSW Court of Appeal found that a ‘declaration of trust’ did not trigger duty on the basis that it merely acknowledged the existence of an existing trust.

Many states now have foreign land tax surcharges that apply to foreign persons including trustee of foreign trusts. As a result many trustees will consider amending their trust deeds to ensure that they don’t inadvertently trigger such surcharges.

Payroll tax captures not only wages paid to employees but also certain payments made to contractors. In this part 6 of our payroll tax series, we look at what is a contractor and what payments to contractors are caught by the payroll tax regime. In part 7 we will examine the exemptions that apply to contractors.

As follow on from part 6 of our payroll tax series, where we identified when payments to contractors will be caught by the payroll tax system, in this article we consider the various exemptions that can apply to such payments to contactors. Importantly, if any of these exemptions apply, such payments to contractors will not be subject to payroll tax.

The Victorian State Budget for the 2020-21 year has been much awaited in light of the recent Covid-19 pandemic. The budget focused on promoting investment into housing and planning, rebuilding the state and its economy.

In part 8 of our payroll tax series, we explore how payments under an employment agency contract may be subject to payroll tax. The employment agency contracts were initially inserted into the Victorian Payroll Tax Act 2007 (the Act) as an anti-avoidance measure to capture not only traditional employment agency arrangement but also the interposition of entities

In part 9 of our payroll tax series, we explore the different types of payroll tax exemptions employers may qualify for. While we will refer to theVictorian legislation, these principles apply across all States and Territories as the payroll tax legislation is uniformed across Australia.

In this 10th part of our payroll tax series, we explore the grouping provisions contained in the Payroll Tax 2007 (PTA 2007). While we will refer to the Victorian legislation, similar provisions exist in all states and territories due to a harmonisation of the law.

A common question we receive is whether, and what sort of, a valuation is required to calculate land transfer duty for related party property dealings.

State and territory revenue offices made land tax and payroll tax measures in response to the COVID-19 pandemic. We outlined a summary of the measures as at 1 September 2020 here.

In April 2020 we reported on Land Tax and Payroll Tax measures state and territory revenue offices made in response to the COVID-19 pandemic. As the ramifications of COVID-19 continue to affect Australians, these measures have since been extended and new measures announced.

Each jurisdiction across Australia has a primary production land tax exemption. The requirements of those exemption are similar.

Payments made to independent contractors, under “relevant contracts”, are subject to payroll tax under the Payroll Tax Act 2007 (Vic) unless an exemption applies.

As referred to in our previous articles, the State Revenue Legislation Further Amendment Bill 2020 (NSW) has now received royal assent on 24 June 2020.

Annat v Commissioner of State Revenue [2020] VSC 108 (Annat) highlights the real risk faced by some farm owners in qualifying for a primary production land tax exemption .

Due to the Victorian State Revenue Office’s approach and scrutiny on primary production lands of late, traditional farming land owners are finding that they now must understand the difficult legislative requirements surrounding primary production land tax exemptions, the resulting structuring and record keeping requirements to ensure that they are not unintentionally exposing themselves to large land tax liabilities.