A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Select the first letter of the word from the list above to jump to appropriate section of the glossary.
AUSkey is a single secure sign-on key for accessing online government services. The AUSkey identifies an individual user that is associated to an organisation. The AUSkey consists of a sequence of numbers for the user and the Australian Business Number (ABN) of the organisation. The combination of the two uniquely identifies a user for their organisation.
AUSkey is common to all government agencies participating in SBR-enabled reporting and over time will allow you to login to a range of other business-to-government website services.
This will mean a single credential (e.g. user ids, PIN/passwords, digital certificates) for interacting with government rather than maintaining separate credentials for each agency interaction.
You will need an AUSkey to lodge forms with RevenueSA through your SBR-enabled software.
To register for an AUSkey visit www.abr.gov.au/auskey. This website will also help you learn more about AUSkey and find out which other government agencies accept AUSkey.
An Australia Wide Group exists when organisations related through the grouping provisions of the Payroll tax Act 2009 have group members that pay wages in South Australia and another State and/or Territory of Australia.
Details relating to the grouping provisions can be found in Information Circular No. 4 Groupings, which is available from the RevenueSA website.
An Australia Wide Group will consist of a DI status code taxpayer which is referred to as the Designated Group Employer (DGE) but will not necessarily have other group members registered for South Australian payroll tax, as only group members that individually pay wages in South Australia are required to be registered for South Australian payroll tax. Group members that employ in South Australia that are not the DGE are GI status taxpayers.
An Australia Wide Group is entitled to a proportional deduction entitlement in each State and/or Territory that the group employed. The proportion is based on the percentage of the Australia wide wages the group paid in each jurisdiction. The Australia wide wages of the group are the sum of all wages paid by the group throughout Australia by all group members whether or not they are required to be registered for South Australian payroll tax.
If the whole deduction entitlement is not used by the DGE, RevenueSA will either apportion the unused deduction entitlement to other group members or refund any unused deduction entitlement to the DGE once the Annual Reconciliation is completed for all members of the group.
A bonus is a reward paid to an employee for the services that they have conducted. Whether the bonus originates from the employee reaching a pre-determined objective or is paid in appreciation of the services they have conducted the bonus is paid as a reward for the employee’s services. Accordingly such a payment is liable to payroll tax in South Australia.
Allowances are generally payments that are made to employees for specific work costs that will be incurred. They can also be made to compensate for working in arduous, dirty or dangerous conditions. As allowances are paid as part of the employees agreed employment terms they are taxable for South Australian payroll tax purposes. Generally the full amount of the allowance is taxable.
However, there are two exceptions to this rule, these being travel allowances and accommodation allowances. Both these allowances have an exempt threshold that is only taxable on the allowance in excess of the prescribed rate.
The prescribed rates have been aligned with the rates determined by the Federal Commissioner of Taxation and are reviewed in July each year.
For more information and prescribed exemption rate see Revenue Ruling PTA005 – Exempt Allowances: Motor Vehicle and Accommodation which is available from the RevenueSA website.
Please ensure that you declare the gross value of this component – inclusive of all trainee and apprentice allowances or bonuses. There is a separate field to declare the total eligible exempt trainee/apprentice wages, if applicable.
A commission is a payment made to an employee based on a percentage of the profits earned by the employer for the services rendered by the employee. As such, a payment is a reward for the employees services, commissions are taxable for South Australian payroll tax purposes.
The Payroll tax Act 2009 contains provisions that deem all service contractors as being employees of the contracting entity, unless one of the specified exclusion criteria is met. These provisions are aimed at schemes designed to avoid liability for payroll tax by severing the employer/employee relationship.
Where a service contract is deemed taxable for South Australian payroll tax purposes the amount to be declared as taxable wages is the amount payable under the contract less amounts payable for materials/equipment and any goods and services tax payable upon the contract. Where the contract does not distinguish between labour and other costs the Commissioner has determined a specific deduction percentage for particular contract classes, for the non-labour costs component of the contract. Refer to Revenue Ruling PTA018 Contractor Deductions Equipment or Materials.
The provisions initially capture all Relevant contracts under the Act and then certain types of contracts are excluded from the definition of a relevant contract.
A contract is excluded as a relevant contract if it satisfies the criteria as per the following published Revenue Rulings on the RevenueSA website:
1. Service is provided by an owner-driver – PTA006
2. Service is for selling insurance
3. Service is door-to-door sales – PTA007
4. Service is required by your business for less than 180 days in a financial year – PTA020
5. Contractors Ordinarily Rendering Services to the Public – PTA021
6. Service is not ordinarily required by your business –PTA022
7. Performed by 2 or more people or engaging others – PTA023
8. Service is provided for less than 90 days in a financial year – PTA035
9. Labour is ancillary to the provision or use of goods - PTA033
For further information regarding the exclusion provisions and deduction percentages see Information Circular No. 5 Contractors which is available from the RevenueSA website.
For South Australian payroll tax purposes the current maximum deduction entitlement is $600,000. The deduction entitlement that either a non-group organisation or a group of companies is entitled to is determined by two factors.
1. The number of days that the organisation/group employed Australia wide during the financial year.
2. The portion of taxable wages that were paid in South
Australia compared to their total Australia wide wages.
Non-grouped employers
The deduction entitlement for non-grouped employers is calculated by using the following formula:
Group employers
The Deduction entitlement for group employers is determined with reference to the total South Australian taxable wages of the group and the total Australian taxable wages of the group as if the group is a single employer.
The Designated Group Employer (DGE) claims the deduction entitlement on behalf of the group. In circumstances where the whole deduction entitlement is not used by the DGE, RevenueSA will either apportion the unused deduction entitlement to other group members or refund any unused deduction entitlement to the DGE once the Annual Reconciliation is completed for all members of the group, upon application by the DGE.
The group deduction entitlement is calculated by using the following formula:
Please Note: If there has been a status change throughout the financial year, the deduction entitlement is required to be calculated by applying the appropriate formula for each separate status. The full financial years deduction entitlement is the sum of each status period's deduction entitlement.
However, when a non group employer that employs solely in South Australia (SS) begins to employ in States and/or Territories other than South Australia (SI) or vice a versa the deduction is calculated for the whole financial year, not for each status period.
The Designated Group Employer (DGE) is regarded as the head of the group for South Australian payroll tax purposes.
A group exists where:
i) corporations are related bodies corporate within the meaning of Section 50 of the Corporations Act 2001;
ii) common employees are used between businesses;
iii) the same person has (or the same persons together have), a controlling interest (greater than 50%) in at least two businesses; or
iv) an entity has a direct, indirect or aggregate controlling interest (greater than 50%) in a corporation.
Details relating to the grouping provisions can be found in Information Circular No. 4 Groupings which is available from RevenueSA website.
It is the responsibility of the DGE to provide specific wage and group structural information as part of the Annual Reconciliation process. By providing this information the DGE benefits from receiving the group deduction entitlement.
For payroll tax purposes a group of organisations can be defined as either a South Australian group or an Australia wide group. To be defined as a South Australian group, all the group members must employ solely in South Australia. If these circumstances prevail, the DGE of the South Australian group is allocated a DS status code.
An Australia wide group will have at least one group member employing in South Australia and at least one group member employing in States and/or Territories other than South Australia. If these circumstances prevail, the DGE of the Australia wide group is allocated a DI status code.
If you are the designated group employer and fail to provide you group member wages then you will not receive a deduction entitlement.
Device AUSkey is a type of AUSkey that identifies a business rather than an individual. They are issued in the name of servers or IP addresses.
See also AUSkey.
The DI status code is allocated to taxpayers that are the Designated Group Employer (DGE) of a group of companies, where at least one member of the group employs in South Australia and at least one member of the group employs in a State and/or Territory other than South Australia.
As the DGE the organisation is regarded as the head of the group for South Australian payroll tax purposes and as such is required to provide some extra information for the South Australian Payroll tax Annual Reconciliation. The extra information required by the DGE are: -
• Details of group members that employed in Australia during the financial year, the taxable wages the group member paid both in South Australia and in other States and/or Territories and the period/s that they were members of the group. This information is to include group members Australia wide.
• Estimates of the group’s wages payable in South Australia and Interstate on behalf of the group for the next financial year.
As the DGE of a group that has members that employ in States and/or Territories other than South Australia, the group is entitled to a proportional deduction in each State and/or Territory that the group employed. The proportion is based on the percentage of the Australia wide wages the group paid in each jurisdiction.
If you do not provide all your group member wages then you will not receive a deduction entitlement.
The DGE of the group may be different in others States.
Please note that if the whole deduction entitlement is not used by the DGE, RevenueSA will either apportion the unused deduction entitlement to other group members or refund any unused deduction entitlement to the DGE. This is completed once the Annual Reconciliation has been completed for all group members and upon application by the DGE.
Directors’ remuneration, such as director fees, superannuation, allowances, fringe benefits and shares and options, is subject to payroll tax. This applies for both working and non-working directors.
The DS status code is allocated to taxpayers that are the Designated Group Employer (DGE) of a group of organisations where all members of the group employ solely in South Australia.
As the DGE, the organisation is regarded as the head of the group for South Australian payroll tax purposes and as such is required to provide extra information for the South Australian Payroll tax Annual Reconciliation. The extra information required by the DGE are:
• Wage details of other group members that make up the group.
• Estimates of wages on behalf of the group for the next financial year.
Where the group employs solely in South Australia the DGE is entitled to claim the maximum deduction entitlement for the financial year. The only circumstances where the DGE will not be entitled to claim the maximum deduction entitlement is when the DGE either did not employ for the full financial year or was only the DGE for a portion of the financial year. In these circumstances the deduction entitlement is calculated on a proportional basis depending on the number of days that the employer was the DGE for the group.
If the whole deduction entitlement is not used by the DGE, RevenueSA will either apportion the unused deduction entitlement to other group members or refund any unused deduction entitlement to the DGE once the Annual Reconciliation has been completed for all members of the group and upon application by the DGE.
Eligible Exempt Trainees/Apprentice Wages
From 1 July 2010 a new exemption for eligible trainees and apprentice wages has been introduced:
Wages paid or payable from 1 July 2010 to an apprentice or trainee in the following circumstances are exempt wages:
(a) by an approved group training organisation;
(b) by an employer if the apprentice or trainee is undertaking training under—
• a school-based training contract; or
• an initial training contract between the employer and the apprentice or trainee; or
• a training contract entered into prior to 1 July 2010 that is current on that date.
It is a requirement that you must declare in your return the total value of eligible trainee and apprentice wages for the period to receive the exemption.
Your declared wage component splits should include the gross value of each wage component – inclusive of all trainee and apprentice wages. The total exempt eligible trainee and apprentice wages for the period must be declared as a separate component on your return. The exempt eligible wages are then deducted from your gross South Australian wages to provide you with your South Australian taxable wages.
Employer Superannuation Payments
"Superannuation benefits" means: -
Paid or payable:
• to a superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 (Cwlth);
• as a superannuation guarantee charge within the meaning of the Superannuation Guarantee (Administration) Act 1992 (Cwlth);
• to or as a form of superannuation, provident or retirement fund or scheme, including to the Superannuation Holding Accounts Special Account within the meaning of the Small Superannuation Accounts Act 1995 (Cwlth), and to a retirement savings account within the meaning of the Retirement Savings Accounts Act 1997 (Cwlth);
Please note that taxable superannuation benefits will include:
• superannuation contribution paid or payable in respect of a company director (including a non-employee director), or in respect of a person taken to be an employee under the contractor provisions in Division 7 of the Payroll Tax Act 2009;
• non-monetary contributions to a superannuation fund on behalf of an employee, a contractor deemed to be an employee or director. The value of these contributions is to be worked out in accordance with Section 43 of the Payroll Tax Act 2009;
• payments made as part of a pre-income tax salary packaging arrangement are to also to be included as taxable wages for South Australian payroll tax;
• Building Industry Redundancy Scheme Trust (BIRST) payments are taxable as superannuation payments.
Please ensure that you declare the gross value of this component – inclusive of all trainee and apprentice superannuation. There is a separate field to declare the total eligible exempt trainee/apprentice wages, if applicable
The term 'Employer's Wages' refers to the South Australian and/or Interstate wages paid or payable by your organisation.
In the case of Group Employer's the term ‘Employer's Wages' refers to the South Australian and/or Interstate wages paid or payable by the organisation as a separate entity to the other group member organisations.
As part of the Annual Reconciliation process each individual organisation is required to provide estimated wage details for the new financial year. Depending on the allocated status of your organisation you will be required to provide estimated South Australian wages and estimated Interstate wages for your organisation. If your organisation is the Designated Group Employer (DGE) you will also be required to provide estimated South Australian wages and estimated Interstate wages on behalf of the members of the group.
The estimated wages are used as a basis for calculating the estimated deduction entitlement for your organisation or the group for the new financial year. The estimated deduction entitlement is then to be used in the calculation of payroll tax for each periodic return lodged.
For South Australian payroll tax purposes the maximum
estimated deduction entitlement is $600,000. The estimated deduction entitlement
that either a non-group organisation or a group of companies is allocated
is determined by the portion of taxable wages that were paid in South
Australia compared to their total Australia wide wages.
Estimated Deduction Non-grouped employers
The estimated deduction entitlement for non-grouped employers is calculated by using the following formula:
Estimated Deduction Group employers
The estimated deduction entitlement for group employers is determined with reference to the total South Australian taxable wages of the group and the total Australian taxable wages of the group as if the group is a single employer.
The Designated Group Employer (DGE) is allocated the estimated deduction entitlement on behalf of the group. In circumstances where the whole of the estimated deduction entitlement is not used by the DGE the unused portion of the estimated deduction entitlement should not be allocated to other group members.
At the end of the financial year once the actual deduction entitlement is calculated RevenueSA will either apportion any unused deduction entitlement to other group members or refund any unused deduction entitlement to the DGE once the Annual Reconciliation is completed for all members of the group, upon application by the DGE.
The group estimated deduction entitlement is calculated by using the following formula:
Structural changes affecting the individual organisations grouping status and/or, the organisation/group ceasing or beginning to pays wages in more than one State and/or Territory will alter the estimated deduction entitlement. Accordingly, such structural changes should be reported to RevenueSA in writing or through the annual reconciliation.
Wages paid by certain employers are exempt from payroll tax as provided under Part 4 and Schedule 2 of the Act.
An exemption will generally apply to wages paid by the following types of organisations:
• from 1 July 2009, non-profit organisations having as their sole or dominant purpose a charitable purpose (Note: prior to 1 July 2009, non-profit organisations were required to have wholly charitable purposes);
• religious or public benevolent institutions;
• public hospitals;
• non-profit private hospitals;
• non-profit schools or colleges for wages paid to persons providing education at or below (but not above) the secondary level of education;
• non-profit child care centres and kindergartens;
• municipalities, other than wages paid or payable in connection with specified business activities
• non-profit health services providers; and
• a motion picture production company, if meets eligibility criteria.
It is important to note that generally, only wages paid to persons performing services that relate directly to the objects of the body are exempt.
In all cases, except applications by motion picture production companies, employers must apply, in writing, to the Commissioner. The applicant must provide full details relating to the operations of the organisation, as well as a copy of the Constitution of the organisation.
For details on the types of organisations that may be exempt see Information Circular No. 2 General which is available from the RevenueSA website.
Employers who are exporters of value added goods or services may claim a rebate of 20% of payroll tax payable on the wages of employees engaged in generating eligible export earnings.
The rebate is equal to 20% of the proportion of total payroll tax paid in South Australia which is attributable to South Australian export earnings in the rebate period.
Details as of the eligibility criteria can be found in Information Circular No. 7 Rebates which is available from the RevenueSA website.
Applications for the Exporters Payroll tax Rebate Scheme are required to be submitted bi-annually. The first application period is 1 July to 31 December and the second application period is 1 January to 30 June.
Exporters Payroll tax Rebate Scheme Application forms are available from the RevenueSA website.
The definition of wages for payroll tax purposes includes any fringe benefits as defined in the Fringe Benefits Tax Assessment Act 1986 (Cwlth)(FBT Act).
Therefore, as a general rule, benefits that are taxable under the FBT Act are also taxable under the Act and must be declared as wages for payroll tax purposes. The only exception to this general rule is a tax-exempt body entertainment fringe benefit as defined in the FBT Act. Although tax-exempt body fringe benefits are subject to FBT, they are specifically exempt for payroll tax purposes.
If a benefit is exempt under the FBT Act (e.g. a laptop computer) it is also exempt from payroll tax. In addition, if a fringe benefit has a nil taxable value for FBT purposes (e.g. the taxable value is reduced to nil under the “otherwise deductible” rule), it also has a nil taxable value for payroll tax purposes.
Records used to substantiate FBT claims made to the ATO are also acceptable for payroll tax.
The taxable amount of fringe benefits for payroll tax purposes is determined by grossing up the fringe benefit using only the lower (Type 2) gross-up rate available in the FBT Act.
Employers are required to declare in their monthly returns the actual value of fringe benefits provided in each month. However, for administrative ease, past and present payroll tax legislation allows employers to formally elect to adopt an alternative method, whereby the amounts declared are based on the FBT returns submitted to the ATO.
Where such an election is made, employers must include in each monthly payroll tax return from July to May, one-twelfth of the taxable value (for payroll tax purposes) of fringe benefits using the FBT return for the year ending
31 March immediately preceding the start of each financial year. The annual reconciliation for each financial year will include the taxable value (for payroll tax purposes) of fringe benefits declared in the FBT return ending
31 March immediately before the annual reconciliation.
Where an employer had made an election to adopt the alternative method of declaring fringe benefits under the old Act, the election remains in force and the employer is not required to make a further election under the Act.
Once an election is made, an employer will not be permitted to revert to declaring the actual value of fringe benefits in monthly payroll tax returns, unless the Commissioner gives approval in writing.
An employer must not use a combination of methods.
For additional information see Revenue Ruling PTA003 Fringe Benefits which is available from the RevenueSA website.
Please ensure that you declare the gross value of this component – inclusive of all trainee and apprentice fringe benefits. There is a separate field to declare the total eligible exempt trainee/apprentice wages, if applicable.
The GI status code is allocated to taxpayers that are members of a group where at least one of the members of the group during the financial year employed in a State and/or Territory other than South Australia.
Please note that to be a GI status taxpayer it is not necessary for the organisation to employ outside of South Australia as only one related group organisation is required to employ outside of South Australia for the GI status to be relevant.
As a group member that is not the Designated Group Employer (DGE) for South Australian payroll tax the GI status organisation is generally not entitled to claim a deduction entitlement for South Australian payroll tax. If the DGE's wages do not exceed the group's deduction entitlement then the GI status organisation may be apportioned part of the remaining deduction entitlement at the discretion of RevenueSA. RevenueSA will determine the allocation of unused deduction entitlement once all reconciliations have been completed for the group.
Group member is the term used for all organisations grouped through the grouping provisions of the Payroll tax Act 2009.
A group exists where:
i) corporations are related bodies corporate within the meaning of Section 50 of the Corporations Act 2001;
ii) common employees are used between businesses;
iii) the same person has (or the same persons together have), a controlling interest (greater than 50%) in at least two businesses; or
iv) an entity has a direct, indirect or aggregate controlling interest (greater than 50%) in a corporation.
Details relating to the grouping provisions can be found in Information Circular No. 4 Groupings which is available from RevenueSA website.
There are two forms of groups that exist in South Australia for payroll tax purposes. These are South Australian groups and Australia wide groups.
A South Australian Group will have members that pay wages solely in South Australia. An Australia Wide group will have members that pay wages in South Australia and members that pay wages in States and/or Territories other than South Australia or members that pay wages both in South Australia and other States and/or Territories other than South Australia.
A South Australian group will consist of one DS status taxpayer which is referred to as the Designated Group Employer (DGE) and one or more GS status code taxpayers which are the referred to as the group members.
An Australia Wide group will consist of one DI status taxpayer which is referred to as the Designated Group Employer (DGE) but may or may not have other group members referred to as GI status code taxpayers registered for South Australian payroll tax. Whether the group members pay wages in South Australia will determine whether the group member will be required to be registered for payroll tax in South Australia. Although the group member may not be required to register for South Australian payroll tax their wage details paid in States and/or Territories other than South Australia are required for the calculation of the group's deduction entitlement. Therefore all members of the group that pay wages in Australia are required to be declared by the DGE as part of the Annual Reconciliation.
The GS status code is allocated to taxpayers that are members of a group where all of the group's members employ solely in South Australia.
As a group member that is not the Designated Group Employer (DGE) for South Australian payroll tax the GS status organisation is generally not entitled to claim a deduction entitlement for South Australian payroll tax.
If the DGE's wages do not exceed the group's deduction entitlement then the GS status organisation may be apportioned part of the remaining deduction entitlement at the discretion of RevenueSA. RevenueSA will determine the allocation of unused deduction entitlement once all reconciliations have been completed for the group, upon application by the DGE.
An intermediary is a third party (e.g. accountant, lawyer) that acts as an agent on behalf of a principle.
RevenueSA will allow an intermediary to act on behalf of taxpayers via SBR, subject to authorisation by the taxpayer. This will allow the authorised Intermediary to use their own AUSkey credential when lodging on your behalf.
A SBR intermediary application form including relevant Terms and Conditions, is available at: www.revenuesa.sa.gov.au/forms/prt_intermed.pdf
The term 'Interstate Wages' refers to any wages deemed taxable in another jurisdiction other than South Australia for payroll tax purposes in that particular jurisdiction.
Where the Australian wages do not exceed the threshold of a particular jurisdiction the following is to apply. The wages to be declared as interstate wages are the sum of all the wages paid in the particular jurisdiction that would be taxable pursuant to the Payroll tax Act 2009 if the wages were paid in South Australia.
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 provisions, 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.
For further guidance on the application of the nexus provisions, please
refer to Information Circular No. 11 Nexus Provisions
which is available from the RevenueSA website.
The term 'Other Group Member's Wages' refers to the South Australian and/or Interstate wages paid or payable by all other group members that employ in Australia apart from the Designated Group Employer (DGE).
Employees working in another country for six months or less
Where an employee is working in another country or countries for a period of six months or less, a payroll tax liability arises in South Australia if the wages are paid or payable in South Australia.
Employees working in another country for more than six months
If an employee is working in another country or countries for a continuous period of more than six months, then the wages paid or payable to that employee for the whole period will be exempt from payroll tax. In these circumstances, the six month period need not be within the same financial year, but must be a continuous period.
Should an employee that is working in another country return to Australia it will not be considered to be a break in continuity of their overseas employment if the employee returns to Australia under the following circumstances:
for a holiday; or
to perform work exclusively related to the overseas assignment for a period of less than one month.
In either case, the employee must immediately return to that country or another country to continue their overseas employment.
Services performed offshore
Where an employee is working outside all Australian jurisdictions, but not in another country, the wages are taxable in the Australian jurisdiction in which the wages are paid or payable. The exemption available for employees working in another country or countries would not apply in this circumstance.
For further guidance on the application of the nexus provisions, please refer to Information Circular No. 11 Nexus Provisions which is available from the RevenueSA website.
The term 'Payments in Kind' refers to any non-monetary payment of goods and/or services rewarded to an employee for services rendered in their capacity as an employee.
The full monetary value of the goods and/or services, are to be declared as taxable wages.
Please ensure that you declare the gross value of this component, inclusive of all trainee and apprentice payments in kind. There is a separate field to declare the total eligible exempt trainee/apprentice wages, if applicable.
Renewable Energy Projects Rebate
The rebate is equal to 100% of the total payroll tax paid in South Australia that is attributable to the labour associated with direct, on-site construction of new, large scale wind and solar energy projects that begin construction on or after 1 July 2010.
For more details see Information Circular No. 9 Rebates for Renewable Energy Project which is available from the RevenueSA website.
Taxable wages and salaries are the gross wages and salaries paid including any Pay-As-You-Go (PAYG) withholding amounts or other deductions made by an employer on behalf of an employee. Taxable wages include such payments as overtime pay, penalty payments, sick pay, holiday pay and leave loadings.
‘Wages’ do not have to be paid directly by an employer to an employee in order to be taxable. Payments to a person other than an employee, or payments by a person other than the employer, are subject to tax where the payments are made in relation to an employee’s services. For example, an entertainment allowance paid to an employee’s spouse is taxable as it is a payment to a third party in relation to the employee’s services
There are exempt components of some wage types. For details on the eligibility criteria for these wage type exemptions refer to Information Circular No. 2 General, which is available from the RevenueSA website. The exempt components relate to:
• Worker Cover compensation;
• Defence force payments;
• Redundancy payments – income tax free component;
• Volunteer emergency workers;
• Community development employment project;
• Construction industry long service leave contribution; and
• Maternity and adoption leave.
There is no exemption in respect of payments made to an employee who is on jury duty.
Payroll tax is not payable on the Goods and Services Tax (GST) component that may arise in payments to employees or deemed employees.
Please ensure that you declare the gross value of this component – inclusive of all trainee and apprentice wages. There is a separate field to declare the total eligible exempt trainee/apprentice wages, if applicable.
The various accounting or financial software packages and some industry or business-specific financial management systems will be SBR-enabled for government forms in scope. The software providers have the choice of SBR-enabling any or all of the forms in scope for SBR (refer to www.sbr.gov.au/About_SBR/How_SBR_works/Forms_in_scope.aspx).
To lodge South Australian payroll tax monthly returns and payroll tax annual reconciliations through your software, check with your Financial Management software provider to ensure that it is SBR-enabled for that particular form.
Shares or options issued under employee share acquisition schemes as liable wages. Under these provisions, the grant of a share or option to an employee, a director (including for the appointment of a director), or deemed employee, now constitute wages.
The granting of a share or option, which is classified as a fringe benefit under the FBT Act is not treated as a fringe benefit, but rather as wages for payroll tax purposes.
The SI status code is allocated to taxpayers that are stand-alone (non-group) organisations that employ in South Australia and in another State and/or Territory other than South Australia.
As a taxpayer that employs in more than one State and/or Territory the SI status taxpayer is entitled to a proportional deduction in each State and/or Territory that they employed. The proportion is based on the percentage of the Australia wide wages the organisation paid in each jurisdiction.
A South Australian Group exists when organisations related through the grouping provisions of the Payroll tax Act 2009 pay wages solely in South Australia.
Group member is the term used for all organisations grouped through the grouping provisions of the Payroll tax Act 2009.
A group exists where:
i) corporations are related bodies corporate within the meaning of Section 50 of the Corporations Act 2001;
ii) common employees are used between businesses;
iii) the same person has (or the same persons together have), a controlling interest (greater than 50%) in at least two businesses; or
iv) an entity has a direct, indirect or aggregate controlling interest (greater than 50%) in a corporation.
Details relating to the grouping provisions can be found in Information Circular No. 4 Groupings which is available from RevenueSA website.
A South Australian Group will consist of one DS status code taxpayer, which is referred to as the Designated Group Employer (DGE) and one or more GS status code taxpayers which are referred to as the group members.
As the group employs solely in South Australia the DGE is entitled to claim the maximum deduction entitlement for the financial year. The only circumstances where the DGE will not be entitled to claim the maximum deduction entitlement is when the DGE either did not employ for the complete financial year or was only the DGE for a portion of the financial year. In these circumstances the deduction entitlement is calculated on a pro-rata basis depending on the number of days that the DGE was the DGE for the group.
If the whole deduction entitlement is not used by the DGE, RevenueSA will either apportion the unused deduction entitlement to other group members or refund any unused deduction entitlement to the DGE once the Annual Reconciliation is completed for all members of the group upon application by the DGE.
South Australian Taxable Wages
Generally any monetary payment or payment in kind to an employee for services rendered in their capacity as an employee will be included as a component of taxable wages.
For South Australian payroll tax purposes taxable wages are broken into the following components and include all salaries and wages, commissions, bonuses and allowances, directors fees, fringe benefits, shares and options, contractor payments, termination payments and employer superannuation payments.
Where the employee provides their services wholly in one jurisdiction payroll tax will be paid to the jurisdiction where those services are performed.
In circumstances where employees provide their services in South Australia and in another jurisdiction or overseas during a month, whether the wages are to be included as South Australian taxable wages can be determined by using the nexus provisions. For further guidance on the application of the nexus provisions, please refer to Information Circular No. 11 Nexus Provisions which is available from the RevenueSA website.
The SS status code is allocated to taxpayers that are stand-alone (non-group) organisations that employ solely in South Australia.
As a SS status taxpayer the organisation is entitled to claim the maximum deduction entitlement for the financial year. The only circumstances where the SS will not be entitled to claim the maximum deduction entitlement is when the SS taxpayer did not employ for the complete financial year. In these circumstances the deduction entitlement is calculated on a proportional basis depending on the number of days that the organisation employed.
Standard Business Reporting (SBR)
Standard Business Reporting (SBR) is an Australian Government initiative to reduce the business-to-government reporting burden.
SBR:
• is reporting to government agencies directly from your financial, accounting or payroll system, provided your software supports SBR;
• makes business financial reporting easier to understand with a single reporting language; and
• will provide a single secure online sign-on, AUSkey, for users to report electronically to all of the agencies involved.
The agencies participating in SBR are the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA) and all state and territory government revenue offices.
From 1 July 2010 RevenueSA will be able to accept the following lodgements through your business software, if it is SBR-enabled:
• 2010-11 Payroll Tax Monthly Returns; and
• 2010-11 Payroll Tax Annual Reconciliation (Due 21 July 2011).
More information about SBR is available here.
In South Australia an organisations payroll tax liability is calculated depending on two aspects of the organisations structure. The relevant aspects of the organisations structure are: -
The individual organisations grouping status. For example whether the organisation is a member of a group of companies or a stand-alone non-group employing entity; and
Whether the organisation pays wages in more than one State and/or Territory or has members in the same group of companies that pay wages in States and/or Territories other than South Australia.
A group exists where:
i) corporations are related bodies corporate within the meaning of Section 50 of the Corporations Act 2001;
ii) common employees are used between businesses;
iii) the same person has (or the same persons together have), a controlling interest (greater than 50%) in at least two businesses; or
iv) an entity has a direct, indirect or aggregate controlling interest (greater than 50%) in a corporation.
Details relating to the grouping provisions can be found in Information Circular No. 4 Groupings which is available from RevenueSA website
Currently in South Australia there are six status codes that can apply to a taxpayers registration. These status codes are listed below with an explanation of each.
SS - Single South Australian company that employed in South Australia only and was not a member of a group of companies.
SI - Single company that employed in South Australia and Interstate and was not a member of a group of companies.
DS - Designated Group Employer of a group who is the only group member entitled to claim the payroll tax deduction entitlement where all of the members of the group paid wages in South Australia only
DI - Designated Group Employer of a group who is the only group member entitled to claim the payroll tax deduction entitlement where at least one group member paid wages Interstate.
GS - A member of a South Australian group of companies, who is not the designated group employer and is not entitled to claim the payroll tax deduction on wages paid in South Australia only
GI - A member of an Australia wide group where at least one group member pays wages Interstate, who is not the designated group employer and is not entitled to claim any of the payroll tax deduction
During a financial year an organisation's structure may change. For example, if the organisation ownership changes through a purchase by another organisation or if the organisation begins to pay wages in another State and/or Territory other than South Australia. In both of these examples the organisations status code will alter so that the organisations status code best reflects their current structure.
RevenueSA is not always made aware that an organisation may have undergone structural change and therefore as part of the Annual Reconciliation process RevenueSA requests that taxpayers review their current structure and if required, advise of any changes which may have occurred to their structure by advising of a new status code.
By amending your status code to best reflect the structure or structures that your organisation experienced during the financial year ensures that RevenueSA can calculate your organisations South Australian payroll tax liability with accuracy. During the financial year it is possible for an organisation to have more than one status code for different periods within the financial year due to ongoing structural changes.
Trainee and Apprentice Wages Rebate Scheme
The Payroll Tax Trainee Wages Rebate Scheme will only be available on wages paid or payable up to 30 June 2010. The Scheme provides an 80% rebate of the payroll tax payable upon the taxable wages of trainees/apprentices where the trainees/apprentices employment is consistent with the eligibility criteria.
All applications for the trainee wages rebate scheme must be received by 31 December 2010 to be processed. For more information about the eligibility criteria of the Trainee Rebate scheme please refer to Information Circular No. 7 Rebates. Application forms are also available from the RevenueSA website.
From 1 July 2010 a new exemption for eligible trainees and apprentice wages has been introduced. Please see Eligible Exempt Trainee/Apprentice Wages.
Payroll tax applies to an employment termination payment (formerly eligible termination payment) (“ETP”), as defined in section 82-130 of the Income Tax Assessment Act, when paid by an employer as a result of an employee's termination.
The amount subject to payroll tax is the whole of the ETP paid by the employer (whether paid to the employee or to a roll-over fund), less any component, which is exempt income when received by the employee. ETP’s paid by employers may include payments for:
• unused sick leave or rostered days off;
• ex gratia payments or 'golden handshakes';
• payment in lieu of notice or service contract payouts;
• compensation for loss of job or wrongful dismissal; or
• bona fide redundancy or early retirement payments in excess of the income tax free limit. (The income tax free components of such payments do not form part of an ETP and are, therefore, not subject to payroll tax).
More information in relation to termination payments can be found in Revenue Ruling PTA004 Termination Payments.
Please ensure that you declare the gross value of this component – inclusive of all trainee and apprentice termination payments. There is a separate field to declare the total eligible exempt trainee/apprentice wages, if applicable.