Who is liable for payroll Tax?
Registration
Tax rates and wage thresholds
What payments are considered 'wages'?
Are contractor payments considered 'wages'?
Groups
Employment outside South Australia
Payroll tax harmonisation
Payroll tax nexus arrangements
More information
Further information is also available in the Payroll Tax Guide to Legislation.
Who is liable for payroll tax?
A payroll tax liability arises in South Australia when an employer (or a Group of employers) has a wages bill in excess of $600 000 for services rendered by employees anywhere in Australia if any of those services are rendered or performed in South Australia.
See Revenue Ruling PTA001:South Australian Payroll Tax Liability for Wages Paid by an Employer for futher information.
Registration
An employer (or a member of a Group of employers) who, in any month, pays wages which are liable to payroll tax in South Australia must register for payroll tax when the Australian wages bill of the employer or group exceeds $50 000 in any month.
For ease of administration, RevenueSA recommends such registration when an employer's wages bill consistently exceeds $12 500 per week.
To register for Payroll Tax click here.
Tax rates and wage thresholds
| Period | Rate | Threshold |
|---|---|---|
| 1 July 2012 to 30 June 2013 1 July 2011 to 30 June 2012 1 July 2010 to 30 June 2011 1 July 2009 to 30 June 2010 |
4.95% | $600 000 |
| 1 July 2008 to 30 June 2009 | 5.00% | $552 000 |
| 1 July 2007 to 30 June 2008 | 5.25% | $504 000 |
What payments are considered ‘wages'?
In general any remuneration attributed to employees is included. Common items are wages, salaries, commissions, bonuses, allowances, directors fees, fringe benefits, payments in kind, eligible termination payments and superannuation contributions.
Additionally, payments for service contracts, to employment agencies, and to other third parties may be deemed to be wages assessable for payroll tax. With respect to service contracts and employment agencies, refer to the Relevant Contractors Decision Tools page.
For further information, refer to the Payroll Tax Guide to Legislation.
Are contractor payments considered ‘wages'?
With respect to service contracts and employment agencies, please refer to the Relevant Contracts Decision Tools page.
Groups
Grouping Provisions within the Payroll Tax Act 2009 are designed to ensure employers are not able to artificially maintain their wages bill below $600 000 per annum by splitting their businesses into separate employing entities.
Only one employer in a group is able to utilise the allowable deduction entitlement. This employer is known as the Designated Group Employer. Any annual deduction entitlement not taken up by the Designated Group Employer can be transferred to the other group members only at the time of Annual Reconciliation.
As this is a complex area, and cannot be fully covered in a brief document, further information should be sought from RevenueSA if you suspect Grouping Provisions may affect you.
For further information, refer to:
Information Circular 4 - Groupings
Commissioner's Discretion to Exclude from a Group - PTA031
Grouping of Professional Practices & Administrative Businesses - PTA017
Application to Exclude from a Group
Employment outside South Australia
The full annual deduction entitlement of $600 000 is only available to employers (or group of employers) who do not pay wages in another state or territory.
If wages are paid elsewhere in Australia the deduction entitlement is calculated using wage estimates for a full financial year and applying the formula below:
Total South Australian Wages |
x $600 000 |
Total Australian Wages |
Payroll tax nexus arrangements
Legislative changes to enable the new nexus arrangements were passed by Parliament on 24 June 2010. The new provisions are uniform across jurisdictions and have retrospective effect from 1 July 2009.
These changes only affect wages for workers providing their services in more than one state in a month. Where a worker provides their services wholly in one state, as is the case for the majority of workers, payroll tax will continue to be paid to the state where those services are performed.
Under the new rules, where the worker provides their services in more than one jurisdiction, payroll tax is to be paid to the jurisdiction where the worker resides, rather than where they are paid (location of BSB), as was previously the case.
Where the worker does not reside in Australia, tax is to be paid to the jurisdiction where the registered Australian Business Number (ABN) address of the employer is located.
Further information is available in Revenue Rulling PTA039.
More information
More detailed information is available in the Payroll Tax Guide to Legislation and the Payroll Tax Information Circulars and Revenue Rulings.
The Payroll Tax Act 2009 can be viewed here.
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This page was last reviewed 20 December, 2012
