The following checklist provides guidance on the payroll tax treatment of certain items based on the legislation in effect at the time of publication. It may be subject to future change.
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
A
Accommodation
Fringe benefit - taxable
The supply of the accommodation to an employee.
Accommodation allowances
Fringe benefit - taxable under certain conditions
Allowance paid to an employee to cover short term away from home expenses. Exempt up to an approved rate. Amount paid over the exempt rate is taxable.
Adoption leave
Exempt wages under certain conditions
Exempt up to 14 weeks, if not taken as official leave (annual, long service or sick leave).
Allowances
Taxable under certain conditions
Motor vehicle allowance and accommodation allowance have an exempt component.
Annual leave (recreation leave, holiday pay)
Taxable
This is a component of the gross wage or salary payable to an employee.
Apprentices wages
Taxable where training contract commenced on or after 1 July 2022
Wages paid to apprentices who commenced a relevant training contract on or after 1 July 2022 are taxable and must be included in your taxable wages component.
Exempt where training contract commenced between 10 November 2020 and 30 June 2022
Wages paid to new apprentices who commenced a relevant training contract between 10 November 2020 and 30 June 2022 (inclusive) are exempt for the first 12 months of their employment.
Taxable where training contract commenced on or before 9 November 2020
Wages paid to apprentices who commenced a relevant training contract on or before 9 November 2020 are taxable and must be included in your taxable wages component.
B
Back pay
Taxable
Taxable as gross wages when paid.
Benefits
Fringe benefit - taxable
An advantage in relation to an employee that has a monetary value.
Building Industry Redundancy Scheme Trust contributions
Not Taxable
Board & quarters
Fringe benefit - taxable
Meal and board provided to an employee under an arrangement by the employer.
Bonuses
Taxable
Incentive or reward for outstanding service.
C
Car allowance
Taxable
Please refer to ‘motor vehicle allowances’.
Car parking
Fringe benefit - taxable
Employers providing or paying car parking expenses for an employee.
Clothing allowance
Taxable
Compensation for purchases such as overalls.
Commissions
Taxable
An amount paid to an employee based on sales.
Construction industry long service leave contributions
Not taxable
Consultants fees
Taxable under certain conditions
Taxable if the consultant is an employee or deemed employee.
Contractors
Taxable under certain conditions
Taxable if the contractor is a deemed employee. An exemption under the contractor provisions may apply.
D
Debt waivers
Fringe benefit - taxable
This is where an employer releases an employee from a debt that is connected to their employment. However, a debt that is written off as a bad debt is not a debt waiver benefit.
Deemed Wages
Taxable
Amounts paid to workers not called employees but where an employer/employee relationship exists.
Defence force payments
Exempt
Payments to employees while absent to work in the Defence Service. Does not apply if employee is on official leave (for example, recreational or long service leave).
Directors fees
Taxable
Payment to a director or member of the governing body of that company for service.
Dirt allowances
Taxable
Paid to compensate for working in unusually dirty conditions.
Discounted Staff Purchases
Fringe benefit - taxable
Value of the discount is taxable as a fringe benefit.
Dividends
Not taxable
E
Education expenses
Fringe benefit - taxable
The employer pays the employee’s enrolment fees and/or other expenses related to education.
Employee Share Acquisition Scheme
Taxable
The value of an employer’s contribution to an employee’s acquisition of shares or rights to shares is taxable.
Employment agency personnel
Taxable under certain conditions
Where an Employment Agency on hires workers to an employer who then pays a fee to the Employment Agency, the Employment Agency is the deemed employer and liable for payroll tax.
Entertainment allowances
Fringe benefit - taxable
Paid to compensate an employee for such expenses as taking a client to lunch.
Entertainment allowances - tax exempt body
Fringe benefit - exempt
Although tax-exempt body entertainment allowances are subject to fringe benefit tax, they are specifically exempt for payroll tax benefits
F
Footwear allowances
Taxable
Compensation to an employee for having to purchase particular types of footwear, for example, safety boots.
Fringe benefits
Taxable
Value of benefits grossed up by Type 2 rate.
Exempt
Fringe Benefit Tax exempt items are also exempt from payroll tax.
G
Golden handshake payments
Taxable
Please refer to ‘Termination Payments’.
Government wages
Taxable
Paid to a person holding office under the Crown, or in the service of the Crown, in the right of the State of South Australia, for example, South Australian State public servants.
Gratuitous payments
Not taxable
‘Tips’ that a worker may receive from a client, as gratitude for good service.
Note: The client must not be their employer or this may form part of a taxable wage.
Gross wages
Taxable
Payments made to an employee for services rendered.
H
Health insurance
Fringe benefit - taxable
Where an employer pays all or part of an employee’s health insurance expense.
Holiday pay
Taxable
Please refer to ‘Annual Leave'.
Housing
Fringe benefit - taxable
Where an employer gives the employee the right to reside in or use accommodation as a usual place of residence.
L
Leave loading
Taxable
This is a component of the gross wage or salary payable to an employee.
Living away from home allowances
Fringe benefit - taxable
Payment to the employee to compensate for additional expenses incurred due to living away from home in order to perform their duties.
Loans (Interest free/low interest)
Fringe benefit - taxable
A loan given to the employee from the employer at an interest rate that is lower than the statutory rate set in the Fringe Benefit Tax Assessment Act 1986.
Long service leave
Taxable
This is a component of the gross wage or salary payable to an employee.
M
Make up pay
Taxable
Please refer to ‘Workers Compensation Payments’.
Maternity leave
Exempt wages under certain conditions
Exempt up to 14 weeks, if not taken as official leave (recreation, long service or sick leave).
Meal allowances
Taxable
Paid to an employee as recompense for having to purchase a meal, for example, a State Public Servant who works overtime may be entitled to a meal allowance.
Meals
Fringe benefit - taxable
Any meal provided to an employee under an award or arrangement by the employer.
Motor vehicles
Fringe benefit - taxable
Where a car is owned or leased by an employer and is made available for private use to an employee.
Motor vehicle allowances
Taxable under certain conditions
Paid to compensate the employee for the use of the employee’s private motor vehicle. Exempt up to an approved rate. Amount paid over the exempt rate is taxable.
P
Paid Parental Leave Scheme (Cwlth)
Not taxable
Payments made to an employee from funds received by employer from Commonwealth Government under the Paid Parental Leave (PPL) Scheme.
Paternity leave
Taxable
Paternity leave is taxable.
Partners drawings
Not taxable
This is the money that a business partner withdraws from their business. It can reduce the partner’s equity.
Payment in kind
Taxable
For example, a fruit shop attendant may be given half their pay in cash and half in fruit and vegetables. In such a case the whole value of the payment is taken to be the wage.
Piece-work payments
Taxable
Generally paid on the basis of a set amount per unit of production, for example, $100 for every tonne of fruit picked.
Prizes
Fringe benefit - taxable
Fringe benefit when received as a consequence of employment, for example, a prize of an overseas holiday for achieving certain sales results.
Professional advice
Fringe benefit - taxable
For example, if the employer paid solicitor’s fees for an employee in relation to a personal matter.
Profit Distribution
Not taxable
Profit distributions or dividend payments to a director of a business are not taxable.
Distributions of profit are taxable where they are given for work performed or services provided by an employee and are paid in lieu of wages (either wholly or in part).
R
Redundancy payments
Taxable under certain conditions
Please refer to ‘Termination Payments’.
Reimbursements (business expenses)
Not taxable
Where an employer reimburses an employee for a business expense incurred by the employee. Usually for a precise amount based on a receipt.
Reimbursements (taxable under Fringe Benefits Tax Assessment Act 1986)
Fringe benefit - taxable
Where an employer reimburses an employee for an expense that is taxable under the Fringe Benefits Tax Assessment Act 1986. Expense will be included in the organisation’s Fringe Benefit Tax (FBT) return and therefore subject to payroll tax.
Relocation expenses
Fringe benefit - taxable
Payments to provide moving costs for an employee.
Rental subsidy allowances
Fringe benefit - taxable
Payments made by an employer to subsidise the rental costs of an employee.
S
School fees
Fringe benefit - taxable
Payment made by an employer to pay, or part pay, school fees incurred by an employee.
Share & options
Taxable
The value of an employer’s contribution to an employee’s acquisition of shares or rights to shares is taxable.
Shift allowances
Taxable
Allowances paid to compensate for working specific shifts.
Sick leave
Taxable
This is a component of the gross wage or salary payable to an employee.
Site allowances
Taxable
Allowance paid to compensate for working in particular sites.
Staff discounts
Fringe benefit - taxable
Value of the discount is taxable at the Fringe Benefit Tax (FBT) Type 2 grossed up value.
Subcontractors
Taxable under certain conditions
Taxable if subcontractor is deemed an employee. An exemption under the contractor provisions may apply.
Subsidised wages - Government Grants
Taxable
Subsidies or partial repayment of wages from a government authority.
Subscriptions
Fringe benefit - taxable
Private subscription expenses that is paid by the employer, for example, membership subscription to the Australian Institute of Management.
Superannuation benefits (employer)
Taxable
All pre-tax employer contributions are taxable.
T
Taxi fares - business use
Not Taxable
Taxi fares paid or reimbursed by the employer for work related travel.
Taxi fares - private use
Fringe benefit - taxable
These are private taxi fares paid or reimbursed by the employer.
Telephone account payments
Fringe benefit - taxable
Private telephone expenses paid by the employer.
Termination payments
Taxable under certain conditions
All termination payments are taxable. Only income tax exempt amounts relating to genuine redundancy or early retirement schemes are exempt.
Tool allowances
Taxable
Allowances paid to an employee to compensate for tool expenses.
Trainee wages
Taxable where training contract commenced on or after 1 July 2022
Wages paid to trainees who commenced a relevant training contract on or after 1 July 2022 are taxable and must be included in your taxable wages component.
Exempt where training contract commenced between 10 November 2020 and 30 June 2022
Wages paid to new trainees who commenced a relevant training contract between 10 November 2020 and 30 June 2022 (inclusive) are exempt for the first 12 months of their employment.
Taxable where training contract commenced on or before 9 November 2020
Wages paid to trainees who commenced a relevant training contract on or before 9 November 2020 are taxable and must be included in your taxable wages component.
U
Uniform allowances
Taxable
Allowances paid to an employee to compensate for uniform expenses.
V
Volunteer emergency workers
Exempt wages under certain conditions
Payments to employees while absent to perform emergency services duty. Does not apply if employee is on official leave (for example, recreation or long service leave).
W
Wages
Taxable
Gross wages are taxable.
Workers compensation payments
Not taxable
Compensation payments made to an employee in accordance with an applicable workers compensation scheme. Any ‘top up’ payments are taxable.