Training contract commences on or before 9 November 2020

Wages paid to apprentices and trainees who commence a relevant training contract on or before 9 November 2020 are taxable and must be included in your taxable wages component.

Training contract commences between 10 November 2020 and 30 June 2022

Wages paid to apprentices and trainees who commence a relevant training contract between 10 November 2020 and 30 June 2022 (inclusive), will receive relief equivalent to a 12 month payroll tax exemption.

Wages paid to these employees do not need to be included in payroll tax calculations. You will need to declare the amount of wages paid separately in the monthly and annual returns.

What wages are eligible?

Wages paid to the apprentice or trainee during their first 12 months of employment.

For more details on wages see the Wages page.

Which apprentices/trainees are eligible?

The apprentice/trainee must commence a relevant training contract between 10 November 2020 and 30 June 2022 (inclusive).

My apprentice/trainee commenced their training contract before 10 November 2020 – are they eligible?

No, the apprentice/trainee must have commenced a relevant training contract between 10 November 2020 and 30 June 2022 (inclusive).

An existing employee has now commenced a training contract – are they eligible?

Existing employees that commence a training contract between 10 November 2020 and 30 June 2022 (inclusive) with your organisation are eligible for the exemption.

How does the trainee and apprentice exemption work – how is it calculated?

The trainee and apprentice exemption provides relief for the first 12 months of wages paid to eligible employees who commence a training contract.

The gross wages paid to employees (salaries and wages, bonuses, allowances, superannuation etc.) in the first 12 months would be subject to the exemption and should not be included in your payroll tax calculations.  You will be required to report the amount paid separately when lodging your returns.

For example, in the first year an apprentice is paid $20,000 made up of wages, superannuation and allowances:

Wages $13,200.00
Superannuation $1,800.00
Allowance $5,000.00
Total$20,000.00

The amount of $20,000 would be exempt from payroll tax.

Any wages paid to employees in the second and subsequent years would be liable to payroll tax and these amounts would need to be declared in your returns.

What happens after the first 12 months?

After the first 12 months, wages paid to apprentices and trainees will become liable for payroll tax and any wages paid must be included in your monthly and annual returns.

Are government departments and agencies eligible for the exemption?

Government Departments and attached agencies are not eligible to claim this exemption. These wages will need to be included in your payroll tax returns.

What happens when I lodge my monthly payroll tax return?

If you have employees that qualify for the apprentice/trainee exemption, you will need to declare this in the return and account for their wages separately.

These wages should not be included in the calculation of the payroll tax liability for the month.

What if an employee has finalised their training contract and remains employed at my organisation?

If an employee has finalised their training contract and is still employed by the same organisation, any wages paid to that employee will no longer be eligible for the exemption and are required to be included in the payroll tax calculation.

I have multiple employees on training contracts, how do I determine what amount is exempt?  

The exempt amount will be the wages paid to the eligible employees during the payroll tax period (month and/or financial year) during their first 12 months of employment.

For example, Company ABC has employed two trainees and one apprentice:

  • Trainee one commenced employment and their training contract on 1 December 2020.
  • Trainee two commenced employment and their training contract on 15 January 2021.
  • Apprentice one commenced employment and their training contract on 5 June 2021.

All three are eligible for an exemption of payroll tax for the wages paid during the first 12 months of their employment. Company ABC would be required to advise the wages in their monthly returns as follows:

 Wages paid to:
 Trainee OneTrainee TwoApprentice One
December 2020Exemptn/an/a
January 2021ExemptExemptn/a
February 2021ExemptExemptn/a
March 2021ExemptExemptn/a
April 2021ExemptExemptn/a
May 2021ExemptExemptn/a
June 2021ExemptExemptExempt
July 2021ExemptExemptExempt
August 2021ExemptExemptExempt
September 2021ExemptExemptExempt
October 2021ExemptExemptExempt
November 2021ExemptExemptExempt
December 2021ExemptExemptExempt
January 2022Taxable1-14 January Exempt
15-31 January Taxable
Exempt
February 2022TaxableTaxableExempt
March 2022TaxableTaxableExempt
April 2022TaxableTaxableExempt
May 2022TaxableTaxableExempt
June 2022TaxableTaxable1-4 June Exempt
5-30 June Taxable
July 2022 onwardTaxableTaxableTaxable

Company ABC would also be required to advise their wages in their Annual Reconciliations as follows:

2020-21 Annual Reconciliation

 Exempt
Wages paid between
Taxable
Wages paid between
Trainee One1 December 2020 and 30 June 2021n/a
Trainee Two15 January 2021 and 30 June 2021n/a
Apprentice One5 June 2021 and 30 June 2021n/a

2021-22 Annual Reconciliation

 Exempt
Wages paid between
Taxable
Wages paid between
Trainee One1 July 2021 and 30 November 20211 December 2021 and 30 June 2022
Trainee Two1 July 2021 and 14 January 202215 January 2022 and 30 June 2022
Apprentice One1 July 2021 and 4 June 20225 June 2022 and 30 June 2022

Does the exemption apply to apprentices/trainees who work interstate?

This exemption only applies to apprentices/trainees employed within South Australia, where wages are required to be declared in South Australia.  Any employee working elsewhere in Australia should be declared according to legislation relevant to that state or territory.

To determine where wages should be declared, please see the Nexus Provisions page.

I am an employer who employs apprentices/trainee across a number of states. How do I declare these wages in the annual return?

Wages paid to apprentices/trainees located in South Australia which meet the criteria for the exemption should not be included in the wages/salaries field. These wages should only be included in the separate apprentice/trainee wages section.

The South Australian exemption does not extend to wages paid to apprentices/trainees outside of South Australia. Wages paid to apprentices/trainees outside of South Australia should be declared in the relevant state or territory according to the legislation relevant to that state or territory. If wages are taxable in the relevant state or territory then they should be included in the interstate wages section of your annual reconciliation.

To determine where wages should be declared, please see the Nexus Provisions page.

If apprentices and trainees are employed through a group training organisation, how are the wages declared?

Apprentices and trainees employed through a group training organisation would not need to be included in your payroll tax returns as these would be reported by the Group Training organisation.

How do I apply for the exemption?

There is no application process.

You will be asked to specify the wages paid to eligible apprentice/trainees in RevenueSA Online.

What information do I need to provide?

You do not need to provide any information, however you should retain evidence (for example the training contract) that supports the validity of the exempt wages for a minimum of 5 years.

Evidence will be required should you be subject to a payroll tax audit in the future.

See Premier's media release regarding extension of this scheme

Training contract commences on or after 1 July 2022

Wages paid to apprentices and trainees who commence a relevant training contract on or after 1 July 2022 are taxable and must be included in your taxable wages component.