Employees from Overseas Payments and benefits related to workers recruited from outside of Australia (such as 457 Visa Holders) are subject to payroll tax in the same way as workers recruited within Australia. Payroll Tax on Unpaid Wages and Benefits PRTA provides that payroll tax is payable on wages and benefits paid or payable. This means that if, on investigation, it is found that the employer has provided fringe benefits, but not paid fringe benefits tax to the Australian Taxation Office (ATO), TRO will assess payroll tax on the value of fringe benefits that should have been declared to the ATO. The same principle would apply if, for example, an employer has not made superannuation contributions that it was required to make on behalf of employees or contractors, in which case TRO would estimate the value of unpaid superannuation and calculate payroll tax due on that amount. Further information on other types of wages commence on page 21. There is also a comprehensive alphabetical checklist of all types of taxable wages and benefits commencing on page 70. Common Errors Made in Payroll Tax Returns The following table provides a list of the more common payroll tax errors and oversights made by employers in preparing their returns, and is based on TRO’s experience in conducting investigations and answering enquiries from taxpayers. For further information No. Error or Oversight click on link below 1 Misunderstanding What is Meant by Wages Further information is Some employers assume incorrectly that wages means either the available from page 7 employee’s before or after income tax pay. For payroll tax purposes, wages means all payments and benefits provided to employees, directors and (in some cases) contractors. 2 Contractor Payments Further information is In many circumstances, payments to contractors are taxable wages. available from page 34 3 Directors’ Fees and Benefits Further information is Directors’ fees, wages and other benefits (paid to working or available from page 7 directors) are taxable wages. 4 Fringe Benefits Not Recognising Them Further information is – Often employers are providing fringe benefits but do not recognise available from page 26 them as such (for example, home-garaged cars, discounts, family travel). 5 Fringe Benefits Declaring to the ATO but not TRO Further information is – TRO has that some employers are correctly fringe available from page 26 benefits to the ATO, but have overlooked declaring these to TRO.
Employees from Overseas Payments and benefits related to workers recruited from outside of Australia (such as 457 Visa Holders) are subject to payroll tax in the same way as workers recruited within Australia. Payroll Tax on Unpaid Wages and Benefits PRTA provides that payroll tax is payable on wages and benefits paid or payable. This means that if, on investigation, it is found that the employer has provided fringe benefits, but not paid fringe benefits tax to the Australian Taxation Office (ATO), TRO will assess payroll tax on the value of fringe benefits that should have been declared to the ATO. The same principle would apply if, for example, an employer has not made superannuation contributions that it was required to make on behalf of employees or contractors, in which case TRO would estimate the value of unpaid superannuation and calculate payroll tax due on that amount. Further information on other types of wages commence on page 21. There is also a comprehensive alphabetical checklist of all types of taxable wages and benefits commencing on page 70. Common Errors Made in Payroll Tax Returns The following table provides a list of the more common payroll tax errors and oversights made by employers in preparing their returns, and is based on TRO’s experience in conducting investigations and answering enquiries from taxpayers. No. Error or Oversight For further information click on link below 1 Misunderstanding What is Meant by Wages Some employers assume incorrectly that wages means either the employee’s before or after income tax pay. For payroll tax purposes, wages means all payments and benefits provided to employees, directors and (in some cases) contractors. Further information is available from page 7 2 Contractor Payments In many circumstances, payments to contractors are taxable wages. Further information is available from page 34 3 Directors’ Fees and Benefits Directors’ fees, wages and other benefits (paid to working or directors) are taxable wages. Further information is available from page 7 4 Fringe Benefits – Not Recognising Them Often employers are providing fringe benefits but do not recognise them as such (for example, home-garaged cars, discounts, family travel). Further information is available from page 26 5 Fringe Benefits – Declaring to the ATO but not TRO TRO has that some employers are correctly fringe benefits to the ATO, but have overlooked declaring these to TRO. Further information is available from page 26
payroll-tax-guide-nt-employers-businesses.docx