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

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.

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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.

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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.

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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

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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

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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.

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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.

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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.

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J

JobKeeper

Exempt wages (up to subsidy amount)

The JobKeeper wage subsidy amount is exempt from payroll tax.

Any top up payments in addition to the JobKeeper payments are liable to payroll tax.

Jury duty

Taxable

Payment made to an employee while on jury duty.

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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.

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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.

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O

Overtime

Taxable

This is a component of the gross wage or salary payable to an employee.

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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).

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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.

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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.

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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

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.

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U

Uniform allowances

Taxable

Allowances paid to an employee to compensate for uniform expenses.

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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).

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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.

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