Contractor deductions

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The Payroll Tax Act 2009 (the “Act”), which commenced on 1 July 2009, rewrote and repealed the Pay-roll Tax Act 1971 and provides fully harmonised legislation with New South Wales, Victoria, Tasmania and Northern Territory.

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 contract’ under Section 32 of the Act, certain types of contracts are specifically excluded from the definition of ‘relevant contract’. Where none of the exclusions apply, Section 35(2) of the Act allows the Commissioner of State Taxation (the “Commissioner”) to determine an amount which can be deducted from the payments made under the contract.

The purpose of this Revenue Ruling is to set out those deductions for materials and equipment for certain types of contractors and to outline the manner in which new deductions may be granted.

Ruling

Deductions below are for the non-labour components where the contractor provides equipment and/or materials. Based on submissions made by employers and industry representatives, the Commissioner has allowed the following percentage deductions:

If a profession/trade is not listed above, a principal may apply to the Commissioner for a determination with details regarding the cost of materials and equipment provided by the contractor.

View this Revenue Ruling as a PDF (PDF 254KB)