Contractors - what constitutes a day's work
Version Number: 1
Legislation: Payroll Tax Act 2009
Date Issued: 1 July 2009
Revenue Rulings do not have the force of law.
The Payroll Tax Act 2009 (the “Act”), which commenced on 1 July 2009, rewrote and repealed the Pay-roll Tax Act 1971 and provides fully harmonised legislation with New South Wales, Victoria, Tasmania and Northern Territory.
Parties to a ‘relevant contract’ are deemed to be employers and employees (Sections 33 and 34 of the Act) and payments made under a contract are deemed to be wages (Section 35 of the Act). Deemed wages are subject to payroll tax under Section 36 of the Act.
While most contracts for the provision of services come within the meaning of ‘relevant contracts’ under Section 32 of the Act, certain types of contracts are specifically excluded from the definition of ‘relevant contract’. One exclusion is a contract for services of a kind ordinarily required by the designated person (the “principal”) for less than 180 days in a financial year (Section 32(2)(b)(ii) of the Act). Another exclusion is a contract for the provision of services by a person providing the same or similar services to a principal under the contract for no more than 90 days in a financial year (Section 32(2)(b)(iii) of the Act).
The purpose of this Revenue Ruling is to clarify what constitutes a day’s work for the purposes of Sections 32(2)(b)(ii) and 32(2)(b)(iii) of the Act.
A calendar day on which work is performed under a contract is counted as a ‘day’ in determining the number of days on which work is performed by a contractor, regardless of the amount of time worked on that day.
View this Revenue Ruling as a PDF (PDF 206KB)