Workers' compensation payments

Status: Replaced on 14 June 2016 - View Current Version
Version Number: 1
Legislation: Payroll Tax Act 2009
Date Issued: 1 July 2009

Revenue Rulings do not have the force of law.


Preamble

The Payroll Tax Act 2009 (the “Act”), which commenced on 1 July 2009, rewrote and repealed the Pay-roll Tax Act 1971 and provides fully harmonised legislation with New South Wales, Victoria, Tasmania and Northern Territory.

The definition of taxable wages under the Act generally includes the amount shown as gross wages on an employee’s payment summary. However, employers are sometimes uncertain whether payments of workers’ compensation are taxable.

The purpose of this Revenue Ruling is to clarify how workers’ compensation payments are treated for payroll tax purposes.

Ruling

Payments of compensation made in accordance with the Workers Rehabilitation & Compensation Act 1986 (the “Compensation Act”) are not subject to payroll tax. This is the case whether or not the payment to the worker is made by the employer or the insurer.

However, compensation paid to incapacitated workers, in excess of the amount prescribed by the Compensation Act (i.e. ‘make-up pay’) will be subject to payroll tax.


View this Revenue Ruling as PDF (PDF 217KB)