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Welcome to RevenueSA’s educational video series. In this video we will outline what the emergency services levy is and what the funds are used for and where to go for further information.

What is the emergency services levy?

The emergency services levy is a levy on all real property and mobile property for funding emergency services across South Australia.

The mobile property component is included as part of your vehicle registration. RevenueSA administers the emergency services levy on real property.

What is the emergency services levy used for?

The money collected by the emergency services levy is placed into a dedicated fund, the Community Emergency Services Fund, exclusively for the funding of emergency services in South Australia and its related activities, such as prevention.

By paying your emergency services levy you are helping fund the operations of the Metropolitan Fire Service, Country Fire Service and State Emergency Service, this includes the cost of new buildings, fire appliances, tankers and other vehicles and equipment used to fight fires, conduct rescue operations and assist with response and recovery operations for natural disaster events like floods and storms.

Funding is also provided towards the emergency services activities of other government agencies such as the South Australia Police for items such as its response to emergency situations and rescue operations, the Department for Environment, Water and Natural Resources for its bushfire management operations, and the Special Operations Team used for high-risk rescue of the South Australian Ambulance Service.

The State Rescue Helicopter also receives funding towards its emergency services operations.

Non government organisations such as Volunteer Marine Rescue and Surf Life Saving South Australia receive funding towards their emergency service operations and infrastructure needs, and the cost of the fixed and rotary wing aerial shark patrol for our metropolitan beaches during the summer months is also met from the Community Emergency Services Fund.

For further information on how the funds are distributed, please see safecom.sa.gov.au

That brings us to the end of this educational video. If you require any additional assistance please contact us.

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[Music]

Welcome to RevenueSA’s educational video series. In this video we will look at how the emergency services levy is calculated and where to go for further information.

How is the emergency services levy on fixed property calculated?

The emergency services levy on real property is levied each financial year. It is determined based on ownership and usage of land as at 12:01 am on the 1st July. The owner at that time is liable for payment of the emergency services levy for that financial year.

If the property is sold after the 1st July, generally an adjustment will be made by your conveyancers and you may be required to pay a proportion of the levy at settlement.

The emergency services levy is calculated using the formula as shown on the screen. Let’s look at each of these components separately.

The fixed charge component is $50. The fixed charge does not apply to properties located in Regional Area 3. Properties with a land use factor of special community use, such as charitable organisations, hospitals, public halls and nursing homes have a fixed charge of $20.

The variable charge is calculated by using the following formula: capital value multiplied by prescribed area factor, prescribed land use factor and prescribed levy rate. Let’s briefly have a look at each of these components separately.

The capital value is determined by the Office of the Value General. The value is determined using industry recognised valuation processes that take into consideration the current improvements, sales and related market evidence and all other matters that may have an impact on the value of a property.

The area factor for emergency services levy purposes has been divided into four areas, referred to as Regional Area 1, 2, 3 and 4. Each area has a different factor applied to it which reflects the varying levels of emergency services provisions in that area.

The land use category is based on the land use attributed to the property by the Office of the Valuer General. There are seven land use categories for emergency services levy purposes, each of these have a prescribed land use factor. The emergency services levy land use categories are:

• residential;
• industrial;
• commercial;
• vacant land;
• rural;
• special community use; and
• other.

The final component for the variable charge is the levy rate.

The general remission is the amount that State Government contributes on behalf of eligible levy payers to the community emergency services fund. It is the difference between calculating the emergency services levy variable charge using the prescribed factor and levy rate and the effective factors and levy rate. Further information about the prescribed and effective factors and rates are included in the Guide to Emergency Services Levy which is available on RevenueSA’s website.

Owners who are pensioners, beneficiaries of certain Centrelink allowances and some Health Care Card holders may be eligible for a concession on their principal place of residence. If you are eligible for a concession you will also receive the benefit of an increased general remission on your notice. All applications and enquiries for concessions are handled by the Department for Human Services.

Further information regarding eligibility for a concession for the emergency services levy and an online application is available from the website shown on the screen.

Groups of properties that are part of a single farming enterprise for adjoining land, referred to as contiguous land, may be eligible for a reduction of the fixed component of the emergency services levy. The fixed charge will apply to only one of the properties constituting a single farming enterprise or a contiguous group.

That brings us to the end of this educational video. If you require any additional assistance, please contact us.

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What is the value of my land?

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This video is intended as a guide only. We recommend you seek independent advice on state revenue matters and how they impact you and your circumstances.

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[birds chirping]

Your property value is determined by the Valuer-General.

It’s not necessarily the same value you’d get from a real estate agent.

The Valuer-General calculates different types of values for different purposes.

Let’s find out more.

[chime]

RevenueSA uses land values from the Office of the Valuer General to work out the different taxes and levies a property owner pays.

The main property values RevenueSA uses are site value and capital value.

[chime]

Site value is the value of your land as though it was vacant. It takes into account any retaining walls, excavating, levelling, drainage, removal of rocks, stone, sand, soil or timber and vegetation.

But no buildings.

Site value – or the vacant value – is used to work out your land tax.

[chime]

Capital value includes improvements and buildings. It takes into account buildings or other structures, wells, dams and reservoirs and any trees you’ve planted for commercial purposes.

Capital value is used to work out your emergency services levy.

[chime]

What if you don’t agree with your valuation?

If you don’t agree with your property’s value, you can contact the Office of the Valuer General to lodge a formal objection.

You have 60 days from the day you receive your first notice, which includes your council rates and SA Water notices, to lodge your objection.

Find out how to contact them at the end of this video.

If you lodge an objection, you still need to pay your land tax or emergency services levy by the due date.

The Office of the Valuer-General will contact you and RevenueSA with the outcome of your case.

We will then issue you with a revised Assessment with the Reasssessment Reason printed on it, or a refund letter, whichever applies in your situation.

You can contact the Office of the Valuer-General online, by email or post. The details are on the screen and available on our website.

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More information can be found at www.revenuesa.sa.gov.au.

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Am I eligible for the First Home Owner Grant in South Australia?

This video is intended as a guide only. We recommend you seek independent advice about state revenue matters and how they impact you and your circumstances.

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In this video, we’ll outline the eligibility requirements for a first home owner grant of up to $15,000 in South Australia.

Is the first home owner grant available, when buying or building a new home?

You may qualify if you’re building a new home, or buying one, that hasn’t been lived in before.

This includes the purchase or construction of a new home, an off-the-plan apartment, a substantially renovated home, a comprehensive building contract or a contract to build a home and an owner builder.

The first home owner grant does not apply to the purchase of vacant land.

However, once you enter into a comprehensive building contract or contract to build a home, you may be eligible for the first home owner grant.

Is the value of the property taken into consideration?

If you signed a contract on, or after the 6 June 2024, no property value cap applies. This means, there is no limit to the market value for the property you are purchasing.

But contracts signed on or before the 5 of June 2024 are subject to a property value cap. This means, a grant is only available for property purchases up to a certain market value.

See our website for more details.

Who can apply for the first home owner grant?

To apply for the first home owner grant, you must be a natural person and at least 18 years old.

At least one applicant must be an Australian citizen, a permanent resident of Australia or a New Zealand citizen permanently residing in Australia who holds a Special Category visa.

Is ownership of other residential property in Australia considered?

To be eligible for a grant, you, or your spouse or domestic partner, cannot own, or have previously owned residential property in Australia.

However, if you entered into your contract before the 13 February 2025, you may still be eligible for the grant if you, or your spouse or domestic partner, purchased the residential property after the 1 July 2000, and did not reside in the residential property for 6 months or longer.

See our website for more details.

What are the residence requirements?

Your new home, must be the principal place of residence for all applicants, for at least 6 continuous months.

When building a home, all applicants must move in, within 12 months of completion of building.

Or, if you have purchased a new home, within 12 months of settlement.

This means, each applicant, must live in the home full-time, with their personal belongings.

How do I apply for the first home owner grant?

To apply, you can lodge your application with most financial institutions. If you need to receive the grant payment for settlement or a first progress payment, you must lodge your application with your financial institution. Alternatively, you can lodge directly with RevenueSA.

Our website contains details on how to apply, including information and supporting documentation required for both yourself and your spouse or domestic partner, and time frames for applying.

You can lodge your application for the first home owner grant once you have entered into a contract to build or purchase your new home. Your application must be lodged within 12 months of: Completion of the building, if you are building a new home; or Settlement, if you are purchasing a new home.

Is there any stamp duty relief for first home buyers?

As a first home buyer, you might also be eligible for stamp duty relief.

Information on stamp duty relief for eligible first home buyers can be found on RevenueSA's website.

That wraps up our video on the first home owner grant.

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More information can be found on the RevenueSA website.

[on screen no audio] www.revenuesa.sa.gov.au/FHOG

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This video is intended as a guide only. We recommend you seek independent advice about state revenue matters and how they impact you and your circumstances.

This video does not deal with land tax on related corporations or trusts. More information about related corporations, trusts and their land tax treatment can be found on our website.

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Land tax is calculated on the site value of the land which is obtained from the Valuer-General’s Department.

It is the value of the land excluding any [chime sound] buildings or other improvements.

The site values of all taxable land owned in the same land tax ownership will be aggregated, or added together, to determine the land tax payable.

If you own properties in different ownerships, that is, where the owners of the properties are not the same person or the identical group of owners, the properties will be assessed first in the joint ownership and then the individual’s share of the joint properties will be assessed in the individual ownership.

If a property is taxed in a joint ownership, the individual will see a deduction on their individual Land Tax Assessment for their share of the tax on the jointly owned property.

This prevents them being double-taxed on the same property.

There are different rates and thresholds for general land and land that is held on trust.

Trusts can be quite complicated, please see our website for additional information and examples relating to trusts and land tax.

A minimum threshold applies to each land tax ownership. This means that if the total of the combined site values of all the taxable properties in an ownership is below the threshold, land tax will not be applied.

The current thresholds and rates of land tax can be found on the RevenueSA website.

www.revenuesa.sa.gov.au/landtax/rates-and-thresholds

Let’s now look at some examples using the general land tax rates for land that is not held on trust.

These examples have been calculated using the 2024-25 financial year’s general land tax thresholds and rates.

[typing sound]

Courtney owns one taxable property which has a site value of $325,000 and is not held on trust. As this is below the minimum threshold for general land, no tax will be applied.

Umar and Stefan own two taxable properties together, each worth $550,000. They don’t own any other taxable property on their own or with others.

Let’s calculate what their land tax will be.

[typing sound]

Land tax is calculated on a total site value of $1,100,000.

The threshold for 2024-25 is $732,000, therefore the first $732,000 will not attract land tax.

Land tax will be applied on the amount above the threshold, in this scenario it will be applied on $368,000, which is $1,100,000 minus $732,000.

Land tax on $368,000 is calculated at 50c per $100 this equals $1,840.

Land tax payable in this scenario is $1,840.

Charlie and Sam own 4 taxable properties together, each with a site value of $625,000. The total site value is $2.5 million.

Let’s calculate what their land tax will be.

[typing sound]

Land tax is calculated on a total site value of $2.5 million and is calculated as follows.

Land tax on $1,711,000 is $7,570.

In addition to this, land tax will be calculated on the difference between $1,711,000 and $2.5 million, which is $789,000.

Land tax on $789,000 is calculated at $2 per $100 which equals $15,780.

Land tax payable in this scenario is $23,350.

If Charlie also owns individual properties and receives an individual Land Tax Assessment, Charlie’s share of the jointly owned properties will show on that individual Assessment. And a deduction for Charlie’s share of the land tax on the joint properties will reduce the individual Land Tax Assessment.

You can see more examples, including examples for joint ownerships, individual ownerships and multiple ownerships on our website.

More information can be found at www.revenuesa.sa.gov.au/landtax

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This video is intended as a guide only. We recommend you seek independent advice on state revenue matters and how they impact you and your circumstances.

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If you own more than one property in an ownership, land tax will be levied on the total taxable site value of all the land in that ownership.

The total land tax payable will be apportioned against (or “shared between”) each taxable property in the ownership, based on its individual site value.

You might need to know how much each property’s land tax is. Let’s look at how you calculate that.

Our example has 3 parcels of land. The Valuer-General’s Office has provided site values for them at…

$440,000, $210,000 and $290,000. A total of $940,000.

Land tax on this amount is calculated and the Land Tax Assessment is issued.

To get each property’s land tax, the site value of each property is then divided by the total of the combined site values and then multiplied by the total land tax payable.

For this property, it is calculated by dividing $440,000 by the total site value and multiplying by the total land tax payable. This gives you this property’s share of the land tax.

For this property, it is calculated by dividing $210,000 by the total site value and multiplying by the total land tax payable. This gives you this property’s share of the land tax.

For this 3^rd property, it is calculated by dividing $290,000 by the total site value and multiplying by the total land tax payable. This gives you this property’s share of the land tax.

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More information can be found at www.revenuesa.sa.gov.au/landtax

What is the value of my land?

[music plays]

This video is intended as a guide only. We recommend you seek independent advice on state revenue matters and how they impact you and your circumstances.

[music fades]

[birds chirping]

Your property value is determined by the Valuer-General.

It’s not necessarily the same value you’d get from a real estate agent.

The Valuer-General calculates different types of values for different purposes.

Let’s find out more.

[chime]

RevenueSA uses land values from the Office of the Valuer General to work out the different taxes and levies a property owner pays.

The main property values RevenueSA uses are site value and capital value.

[chime]

Site value is the value of your land as though it was vacant. It takes into account any retaining walls, excavating, levelling, drainage, removal of rocks, stone, sand, soil or timber and vegetation.

But no buildings.

Site value – or the vacant value – is used to work out your land tax.

[chime]

Capital value includes improvements and buildings. It takes into account buildings or other structures, wells, dams and reservoirs and any trees you’ve planted for commercial purposes.

Capital value is used to work out your emergency services levy.

[chime]

What if you don’t agree with your valuation?

If you don’t agree with your property’s value, you can contact the Office of the Valuer General to lodge a formal objection.

You have 60 days from the day you receive your first notice, which includes your council rates and SA Water notices, to lodge your objection.

Find out how to contact them at the end of this video.

If you lodge an objection, you still need to pay your land tax or emergency services levy by the due date.

The Office of the Valuer-General will contact you and RevenueSA with the outcome of your case.

We will then issue you with a revised Assessment with the Reasssessment Reason printed on it, or a refund letter, whichever applies in your situation.

You can contact the Office of the Valuer-General online, by email or post. The details are on the screen and available on our website.

[music plays]

More information can be found at www.revenuesa.sa.gov.au.

This video is intended as a guide only. We recommend you seek independent advice on state revenue matters and how they impact you and your circumstances.

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Statement of land held shows all of the land you own or partly own in South Australia even if it’s not taxable land.

This could include your home or other exempt land. If the land is exempt, you’ll see a code instead of a dollar value in the site value column. You’ll also see an explanation of the codes at the bottom of your Statement of land held.

If you see a code, it means we have an exemption for your home and land tax isn’t charged on that property. If you see a value against the property it means that the land does not have an exemption or it only receives a partial exemption. Land that only receives a partial exemption will be indicated on your assessment.

If your exemption does not appear on your Land Tax Assessment you can apply online using the Apply for land tax exemption or relief form. Details about eligibility criteria and what you need to apply are available on our website.

Your land tax will need to be reassessed if your home was taxed and shouldn’t have been. Contact us for information.

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If your land tax needs to be reassessed because your home was included in your original Land Tax Assessment and should have been exempt from land tax, call us on (08) 8226 3750.

More information can be found at www.revenuesa.sa.gov.au/landtax.

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This video is intended as a guide only. We recommend you seek independent advice on state revenue matters and how they impact you and your circumstances.

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Statement of land held shows all of the land you own or partly own in South Australia, even if it’s not taxable land.

This could include property that is exempt from land tax, such as land used for primary production.

If the land is exempt, you’ll see a code instead of a dollar value in the site value column.

You’ll also see an explanation of the codes at the bottom of your Statement of land held.

If you see a code, it means we have an exemption for your land and that property’s value doesn’t count towards your total taxable site value.

No tax is charged on that property.

If your exempt land shows on your Statement, but it has a dollar value it means that we don’t have an exemption recorded for that property.

You can apply for an exemption using the online Apply for land tax exemption or relief form.

Details about the eligibility criteria and what you need to apply are available on our website.

If your application is approved, your land tax will be reassessed and a new Land Tax Assessment will be issued, showing the exemption.

Contact us for information.

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If your land tax needs to be reassessed because your exempt land was included on your original Land Tax Assessment, call us on (08) 8226 3750.

More information can be found at www.revenuesa.sa.gov.au/landtax

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This video is intended as a guide only. We recommend you seek independent advice on state revenue matters and how they impact you and your circumstances.

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From 2020-21 changes were introduced to the way land tax in South Australia is assessed and charged.

One of the changes is how land owned by joint owners is taxed.

If land is owned by 2 or more people, it is assessed in the joint ownership and land tax is charged to the joint ownership.

Then, and this is new from 2020-21, each individual owner is separately assessed on their share of the jointly owned land along with any other land they own.

It means property can show on a joint Land Tax Assessment and then also on the individual Land Tax Assessment of each individual owner.

There are measures in place to stop people being double taxed on the same property that shows on more than one Land Tax Assessment.

See our website for more videos and more information.

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More information can be found at www.revenuesa.sa.gov.au/landtax.

[music fades]

This video is intended as a guide only. We recommend you seek independent advice on state revenue matters and how they impact you and your circumstances.

[music fades]

In 2020-21 changes were introduced to the way land tax in South Australia is assessed and charged.

The changes mean that a parcel of land may appear on more than one Land Tax Assessment where it has more than one owner.

The same property could show on the joint ownership’s assessment and a share of the property could show on the individual owners’ assessments.

To stop people being taxed again on land already fully taxed in the joint ownership, individuals may receive a deduction which offsets their individual land tax.

A deduction is equal to an individual’s share of the land tax applied to the joint ownership.

In many cases the deduction will completely wipe out the individual’s land tax and where this happens, no Land Tax Assessment will be sent to that individual.

However, where the deduction doesn’t cancel out the individual’s land tax they will still receive an assessment which will be reduced by the amount of their deduction.

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More information can be found at www.revenuesa.sa.gov.au/landtax

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Intro

Welcome to today's video payroll tax understanding the basics: allowances, FBT (Fringe Benefits Tax), exemptions and rebates.

For those of you who are new to payroll tax or if you just like a refresher this video explores the key concepts of payroll tax and its Administration this video is the first in our three-part series on payroll tax. We recommend you also view the other videos for further information on contractor provisions and employment agents in video 2 and groupings in video 3.

The harmonised videos are the result of efforts from each of the respective Revenue offices while the content of this video is harmonised there may be some differences between the states and territories so where applicable the differences will be highlighted.

The information provided in this video is of a general nature if you have any specific queries please contact the applicable revenue office or seek independent professional advice. You can find other helpful information resources and links to revenue offices at payrolltax.gov.au.

In this video we will first provide an overview of how payroll tax operates and is administered. We will then go through the thresholds rates and deduction entitlements for each state and territory, provide clarity around which state or territory payroll tax needs to be declared in and how to declare wages. Then we will go through the detail around the various payments that constitute wages for payroll tax purposes and what to declare on your payroll tax returns. Finally we will provide information about the various exemptions from payroll tax and what you can exclude from your payroll tax returns.

Let's begin with an overview of payroll tax.

Payroll tax is a self- assessed and state-based tax paid by employers usually monthly, however some states and territories may allow half yearly or annual lodgement of returns - see each state and territory's website for more information.

Payroll tax is paid by employers on wages paid to employees or deemed employees, this could include certain contractors. Wages is a broad term that needs further explanation and we will cover this in more detail shortly.

Payroll tax is based on taxable wages paid to employees and deemed employees. Employers must register once their total Australia wide taxable wages or groups total Australia wide taxable wages exceeds the threshold. They must register in all states and territories where wages are paid and annual reconciliation must be lodged in July for each Financial year.

The legislation for payroll tax is harmonised across most of the states and territories in Australia so that the treatment of common payroll tax elements is consistent across the country. Differences in the treatment of certain elements of payroll tax will be highlighted throughout the presentation today.

Next we will discuss the payroll tax rates thresholds and thresholds, rates and deduction entitlements calculations. When it comes to payroll tax across Australia you will find that each state and territory will have their own thresholds rates and deduction entitlements that apply.

The legislation for payroll tax was harmonised across most of the Australian States and territories in 2007 so that the treatment of common payroll tax elements is consistent across the country. Differences in the treatment of certain elements of payroll tax will be highlighted throughout the presentation today.

When do you need to register for payroll tax?

if your total Australian wages exceed a state or territory's threshold in any month and wages are paid for services performed in that state or territory you must register for payroll tax in that state or territory. If you are a grouped employer it is your group's total Australian wages that determines if you need to register. The screen displays the annual payroll tax thresholds for each state and territory you can access the monthly or weekly thresholds on the registration page of payrolltax.gov.au.

To register for payroll tax in a state or territory is based on the total Australia wide taxable wages for a week or a month.Generally an employer must register within seven days after the end of the month in which the employer or group of employers wages exceed the the threshold. The employer must register even if they think that their wages will be below the annual threshold. Please check with the relevant state or territory revenue office for more details.

Threshold reduction

The threshold will be adjusted if you or your group of employers employ for only part of the financial year. For employers who do not employ for the whole of the financial year the threshold is calculated by taking into account the proportion of the year the employer operates. For information on part year threshold calculations in a particular state or territory you employ in visit their revenue office website.

Each jurisdiction also has different payroll tax rates which are shown on the screen. Employers may also be entitled to a deduction amount which is subtracted from the total wages before applying the applicable payroll tax rate. The maximum deduction entitlements are shown on the screen. It is also important to note that Western Australia, the Northern Territory and Queensland have a tapering deduction system where the deduction entitlement reduces as wages paid increase. Additionally in South Australia the deduction entitlement is not the same as the annual threshold. Please contact those revenue offices directly for more information if you employ in any of those jurisdictions.

Calculating payroll tax

Let's follow an example of how payroll tax can be calculated.

Here we have an employer that is based in Melbourne, only employees in Victoria employees for the full financial year and and pays annual wages of $1.65 million.

First we need to work out the amount of wages that are taxable by subtracting the deduction entitlement from the annual wages. We do this by taking the annual wages and subtracting the deduction threshold to get the taxable wages as shown on the screen

So what's the payroll tax liability? You take the payroll tax rate that applies and multiply that by the taxable wages to calculate the monthly payroll tax liability. You divide the annual liability by 12.

In some circumstances you may only be entitled to a portion of the deduction entitlement, this will happen when you only employ for part of the financial year and or you employ and pay wages in more than one state or territory. In these circumstances you will receive a reduced deduction. we will now go through some examples of how this works.

If you only apply for part of the financial year you will only be entitled to a portion of the deduction amount in this example we are using Victoria's annual deduction entitlement.

If you employ only in Victoria and for the full financial year you would be entitled to the maximum deduction entitlement as shown on your screen.

If you only employ for part of the financial year your deduction entitlement will be calculated by dividing the number of days employed by the number of days in the year which is 365 or 366 in a leap year and then multiplying by the maximum deduction entitlement, for example if you employ for 292 days your deduction entitlement would be calculated by dividing 292 days by the number of days in the year and multiplied by the total deduction entitlement. In this example there are 365 days in the year. The reduced deduction entitlement for this example is shown on the screen.

Let's look add an example where an employer who pays wages in three states New South Wales, Victoria and South Australia.

The total Australian taxable wages are $2.5 million which are paid across the three states with wages of:

• $550,000 in South Australia
• $1 million in New South Wales and
• $950,000 in Victoria

The deduction entitlement is calculated as a proportion of the wages paid in the relevant state or territory to the total Australian taxable wages. The employer will be entitled to deduction in each state as a proportion of their total wages.

In this example the employer would be entitled to a deduction of

• $480,000 in New South Wales
• $132,000 in South Australia and
• $266,000 in Victoria

Applying the reduced deductions now applicable in Victoria, South Australia and New South Wales you can see on the screen the amount payroll tax will be calculated on.

Exemptions for payroll tax purposes are provided for public benevolent and charitable organisations, publ

ic hospitals, non-profit private hospitals, non-profit private schools and government, including governors, foreign representatives staff and some activities of local councils. Please note that an exemption for local councils is not available in Tasmania.

This may mean that you are not required to register for payroll tax but you may need to apply for an exemption. Should you have any queries in relation to how to apply for an exemption please contact the relevant revenue office for further assistance.

How to determine where wages are taxable?

Let's take a closer look at interstate and overseas workers.

A real confusion with payroll tax is how to treat wages paid to workers who work in other states and territories or overseas.

If a worker performs work in one state or territory in the month then the payroll tax liability arises in that state or territory, for example if a business head office is in Melbourne but the manager is working full-time in Sydney the liability arises in New South Wales.

Payroll tax liability is based on where services are performed, it doesn't matter where the head office is located or where the payment comes from. Therefore, in this example the manager's wages are taxable in New South Wales.

A harmonised position has been developed to ensure consistent treatment of this between states and territories, these are called their Nexus Provisions.  The Nexus Provisions are covered in Revenue ruling PTA39.

Employees working in multiple states/territories

The complexity arises when employers have employees working in multiple states and/or territories in a calendar month. These provisions are particularly relevant in our border regions where employees go back and forth across the border during the month or in transient type employment such as truck drivers or flight attendants.

If the work is not performed solely in one state or territory in the month the Nexus Provisions provide a four tier test to determine where the wages should be declared. The test requires that you start at tier one and only move to the next tier if you are unable to satisfy the requirements of the previous tier. In the majority of cases you will only need to go as far as the first two tests.

The first thing you would look at is where the employees principal place of residence is located. The total month's wages paid to that employee should be declared to that state or territory's revenue office. If you can't establish where the employees principal place of residence is located then you would move to the second tier of the provisions and look at where the employer's ABN is registered or business is located.

In circumstances where you cannot determine where the business is located then you would move to the next tier.

At tier three you look to where the wages were paid or payable that is where the bank account that the employees wages are paid into. If wages are are paid in a number of states or territories, payroll tax is paid in the state or territory where the largest proportion of wages is paid.

If you were still unable to determine where wages are taxable then you would look to where the services were mainly performed, for example if the services performed equate to greater than 50% in the Northern Territory then you would have a payroll tax liability in Northern Territory.

It is important to remember that you can't pick and choose a tier to suit, you must apply the test in order. If it turns out that you have been paying payroll tax to the wrong state or territory there is a Commissioner's Agreement that allows for you to seek a refund from the revenue office you paid the tax to and pay it to the correct revenue office without any penalty or interests applied.

For more information on the Nexus Provisions refer to revenue ruling PTA39 which can be accessed from payroll tax Australia's website payrolltax.gov.au.

Payroll tax liability is in that state or territory, if work is performed in more than one state or territory you apply Test 2 to 4 of the Nexus

Employees working overseas

Provisions wages paid to an employee performing services wholly in another country or countries, that is an expatriate employee, for a period of up to 6 months are taxable for payroll tax. However wages paid in Australia are exempt from payroll tax if the employee has performed services entirely in another country or countries for a continuous period of more than 6 months after wages were first paid for the employee for the services.

The exemption includes wages paid in the first six months of service.

They are able to briefly return for meetings or a holiday but must return overseas and continue to work there.

What are taxable wages?

Let's now look at what taxable wages are.

Payroll tax is based on taxable wages the term taxable wages is very broad and covers most payments made to employees it includes salaries and wages.

Employers must ensure that the gross figure is reported for the purposes of payroll tax and also need to include leave, apprentice and trainee wages, superannuation, bonuses and commissions, allowances, director's fees, shares and options, fringe benefits and termination payments. Please note that this list is not comprehensive.

If you engage contractors these payments may also be liable to payroll tax. To learn more see the contractor provisions and employment agents video.

Let's now have a look at the components that make wages liable in more detail.

Leave payments

Leave payments which are taxable include sick leave annual leave leave loading and long service leave. There are a few exceptions including maternity and adoption leave, fire an emergency services duty and defense force duty.

Maternity and Adoption Leave

Maternity leave and adoption leave payments are exempt from payroll tax to a maximum equivalent of 14 weeks wages. The exemption does not include sick leave, annual leave or other similar leave taken in connection with a pregnancy or the birth or adoption of a child.

For any one pregnancy or adoption the exemption is limited to wages for a maximum of 14 weeks full-time leave for a full-time employee or the equivalent amount if taken over a longer period for example 28 weeks leave being paid at half pay. In the case of a part-time employee the exemption is limited to a maximum of 14 weeks leave paid at the applicable part-time rates of pay.

As an employer you must obtain and record evidence to substantiate the exemption, such as a medical certificate or statutory declaration.

Some states and territories have expanded this exemption to cover paternity parental and surrogacy leave or leave for the primary or secondary caregivers. Please check your relevant state or territory revenue office for details.

The Commonwealth paid parental leave scheme does not constitute wages and is not subject to payroll tax.

Fire and emergency services duty

The fire and emergency services exemption applies to wages paid to Emergency Services Workers while performing volunteer activities. The exemption covers volunteer firefighters and Emergency Services Workers such as state emergency service volunteers and volunteer Marine Rescue Services.

This exemption does not apply to wages provided in the form of annual leave, long service leave, recreation or sick leave.

For the period of absence the employer will be required to provide substantiation which can include records of the length of service by the employee along with all relevant calculations done by the employer to substantiate the total wages records of the period during which the employee was taking part in bush firefighting or emergency activities and/or evidence that the employee is a volunteer officer, for example identification or letter from Brigade leaders.

Defence Force Reserves duty

Wages paid to an employee who is absent from their regular employment to serve in their defense force are exempt from payroll tax.

Documentary evidence may include a statement or letter from the Defense Force to the taxpayer stating the dates of involvement.

Again this exemption does not apply to wages provided in the form of annual leave, long service leave, recreation or sick leave for the period of absence.

Apprentice and trainee wages

The treatment of apprentice and trainee wages varies across the states and territories.

In some states and territories trainee and apprentice wages are taxable however you may find that they are exempt or that other conditions apply in other states and territories.

We recommend that you contact the relevant revenue office or take a look at their website for further information regarding regarding apprentice and trainee wages.

Superannuation

Superannuation contributions including pre-tax contributions are fully taxable, this includes any contributions made on behalf of an employee director or deemed employee. This will include the superannuation guarantee charge, any amounts greater than the superannuation guaranteed charge, salary sacrifice and top up contributions made to defined benefit funds.

Bonuses and commissions

Bonuses and commissions paid to employees or deemed employees are taxable allowances and need to be included in your payroll tax declarations.

Allowances

Allowances are given many different names, for example first aid allowance, height allowance, uniform allowance tool allowance and home office allowance to name a few. Their title is not important, the purpose of the payment is what is relevant and allowances are considered wages for payroll tax purposes.

There are a couple of exceptions to this rule which we will talk about in a moment.

It is important to note that reimbursements are not considered to be wages as they are a business expense and therefore not taxable for payroll tax purposes. The expense has already been incurred by the employee is substantiated with a receipt or claim and the precise amount is reimbursed to the employee.

Motor vehicle allowance

The exemption for motor vehicle allowances has a few conditions in that:

• it must be the employees own car which is either leased or owned by the employee
• the travel must be business travel and
• the distance travel needs to be substantiated through log books, diary entries or expense claim forms

The motor vehicle allowance for calculating payroll tax for the current financial year is shown on the screen. The exempt rate is the rate prescribed under the income tax legislation for calculating a deduction for car expenses use the cents per kilometre method in the financial year immediately preceding the financial year in which the allowance is paid or payable, in other words if you paid it this year you must use the ATO's rate from last year.

There are two methods of substantiation which are accepted:

• the averaging method can be used for 5 years or
• writing down the odometer reading at the start and end of the journey

The revenue ruling for motor vehicle allowance is PTA5, there is an additional revenue ruling for motor vehicle allowances paid to real estate sales persons which is PTA25. If you or your clients are in the real estate industry you should have a look at both revenue rulings.

Let's look at an example. In this scenario the employee is paid a fixed allowance of 2 $100 and travels 100 km.

The exempt component is calculated by multiplying the kilometers by the exempt rate per kilometre. The allowance paid in addition to this amount is taxable.

Accommodation allowance

the next exemption we have is for an accommodation allowance.

For business travel, similar to the motor vehicle allowance exemption, these amounts are exempt to a certain point, but unlike the motor vehicle allowance the accommodation allowance exemption rate uses the ATO rate for the current financial year.

The accommodation allowance amount per night is shown on the screen. This amount consists of three components room, meals and incidentals and is based on the ATO rates for the lowest capital city in the lowest salary band.

These amounts may only be claimed as exempt where they are paid to the employee, for example if the organisation arranges the accommodation and pays for this separately the exempt amount will be for meals and incidentals only.

Reimbursements are not considered to be an allowance and are not taxable for pay tax. If the employee pays for everything and then brings receipts for reimbursement, these amounts are not included for payroll tax.

Chargebacks are also not considered wages and so do not need to be included.

The accommodation allowance covers periods of up to 21 days. If accommodation is required for a longer period of time, the employer must continue to maintain a domestic dwelling for the purpose of accommodating themselves and all their family. If they don't this may be classed as living away from home allowance.

The revenue ruling for accommodation allowances PTA5. There is also an additional ruling PTA24 which is for overnight accommodation 
allowances paid to truck drivers.

In example one, Alex has been paid an accommodation allowance of $250 which is below the accommodation allowance and therefore no declaration for payable tax purposes is required.

In example two Alex's employer has paid for their accommodation but they received a daily allowance of $180 to cover meals and incidentals. This is above the exempt am amount for meals and incidentals, the amount shown on the screen will need to be declared for payroll tax purposes.

Living Away from Home Allowance

A living away from home allowance paid to employees will trigger a liability for fringe benefits tax.

As you can see from the extract of the FBT return on screen this allowance type will therefore be included as part of the fringe benefits amount declared in your pay payroll tax return.

It is important that this amount is not also included as part of the allowances section of the payroll tax return as this results in a double 
declaration.

Directors' fees

Director's fees need to be included regardless of whether they are paid to a working or non-working director. It also doesn't matter where the fees are paid to, they may be paid to the director themselves or possibly to a director's trust or company. All of these amounts need to be included.

It is important to make the distinction between wages or fees paid to directors and payments made to them in their capacity as an owner of the business. Profit distributions are not considered wages and do not need to be declared for payroll tax purposes. Revenue ruling PTA16 covers profit distributions and loan accounts in more detail.

Shares and options

if you provide or give your employees shares or options, the value of the shares or options granted also need to be included in your payroll tax return. This includes shares or options granted by the employer to employees or deemed employees which can include contractors and director or former directors of companies.

Payroll tax applies to the value of an employer's contribution. to any grant of a share or option. The granting of a share or an option occurs if a person acquires a share, or in the case of an option a right to the share the value of the share or option. For the purposes of payroll tax is its value on the relevant day employers can elect to treat the relevant day as either the date that the share or option is granted to the employee or the vesting date. It's up to the employer to decide which of these dates is used as long as they always use a consistent approach.

Shares and options should be declared at the market value or amount determined by the Income Tax Assessment Act.

Fringe benefits

Fringe benefits are taxable for payroll tax purposes the Fringe Benefits Tax Assessment Act is closely aligned with the Payroll tax Act and something taxable under the Fringe Benefits Tax Assessment Act is subject to payroll tax.

If a benefit is exempt under the Fringe Benefits Tax Assessment Act, for example a laptop computer, it is also exempt from payroll tax, This means that you you can use the figures from your fringe benefits tax information and declare them for payroll tax purposes.

However some states and territories may not require some specific types of fringe benefits to be declared please check with the relevant state or territory revenue office.

To use your fringe tax benefit information for payroll tax purposes look to question 14 on your fringe benefits tax return. For payroll tax you will add together your type one and type two fringe benefits and gross them up by multiplying by the type two rate.

Let's have a look at the different declaration methods. There are two methods you could use to declare your French benefits, you can choose which method:

• you use for the actual method you will declare the actual fringe benefits paid in that calendar month for the estimated method
• you will declare an estimate of the fringe benefits each month and then reconcile your fringe benefits in your annual reconciliation

Let's have a look at each of these methods in more detail.

The actual method requires the employer to declare the actual value or fringe benefits provided to employees in the return period. This method may be undesirable to some employers where benefits are provided over a period of time and cannot be pinned down to a particular month.

The estimated method would be used if the actual value of fringe benefits are not tracked on a monthly basis. For the monthly returns you take the previous year's fringe benefits tax return add together the type one and type two fringe benefits, gross by the type two factor and divide by 12. Because there are 12 months in the year this amount is used to declare a monthly estimate of your FBT.

As you move through the financial year when you lodge your annual reconciliation you will need to include the taxable value for payroll tax purposes of fringe benefits declared in the fringe benefits tax return submitted to the ATO for the year ending 31 March. You need to include the fringe benefits tax return submitted immediately before the annual reconciliation in July. You will take the type one and type two fringe benefits on the FBT return, gross up by the type two factor and declare this total amount as the actual fringe benefits for the year. Any differences in the estimated amount and the actual amount will be reconciled at this time .

That final amount will be the figure you will divide by 12 and then declare for your ongoing monthly returns next year, so make sure you take note of it.

For employers who employ in more than one state or territory it is recognised that it may not be possible for an employer to identify state specific components of fringe benefits. This is a common area of over decoration and you should refer to revenue ruling  PTA3 which outlines the method for declaring fringe benefits.

Where the state-by-state component is not readily ascertainable in these circumstances, the fringe benefit amount may be declared on an apportionment basis with reference to the ratio of wages paid paid in each state and or territory.

In the example on screen, the employer employees in Victoria and South Australia. Victorian wages comprise 75% of the total Australian taxable wages. Using the apportioning method 75% of fringe benefits would also be declared in Victoria and 25% would be declared in South Australia.

Termination payments

Payments made on termination are taxable and need to be declared. This includes pay in lieu, contract payouts, severance payments, golden handshakes and leave paid on termination.

The exception to this rule is the income tax-free component of a genuine redundancy or early retirement scheme, this amount will be listed as item D on the PAYG summary.

All other payments made on termination need to be included. The revenue ruling for termination payments is PTA4.

Workers' compensation

Workers compensation payments made in accordance with the applicable workers compensation scheme are exempt from payroll tax in all states and territories.

For many workers compensation claims the compensation amounts won't be reimbursed for the first two weeks . For payroll tax we deem that those compensation amounts have been received therefore the amount of the compensation paid is exempt in these 
first two weeks even though the employer has not received any compensation payments.

If the compensation amount is less than the employees regular pay any top up or makeup payments provided by the employer to the employee to cover the difference is subject to payroll tax.

Rebates

To finish let's take a quick look at rebates.

A rebate is a one-off payment paid to eligible employers to offset their payroll tax liabilities these are determined by the respective state and territory governments and generally come into into effect at the beginning of a financial year or are applied at annual reconciliation.

Each state and territory offers different rebates and these are often only available for a set period of time. We recommend that you contact the relevant revenue office for further information.

End

That brings us to the end of today's video.

If you would like to know more the harmonised payroll tax website payrolltax.gov.au provides plenty of useful information on harmonised payroll tax matters.

Should you have any queries as a result of the information presented in today's video, please contact the relevant revenue office via the websites currently displayed on your screen.

Intro

Welcome everyone to today's video payroll tax contractor provisions and employment agents.

For those of you who are new to payroll tax or if you just like a refresher this video will assist you with the payroll tax treatment of payments to contractors and payments made under employment agent arrangements.

Western Australia’s contractor provisions differ from those covered in this video. For more information on the treatment of contractors for payroll tax purposes in Western Australia please go to customer education at wa.gov.au.

Payroll tax videos

This video is part two of our three-part series on payroll tax.

We recommend you also view the other videos for further information on payroll tax, they are video 1: understanding the basics (allowances, fringe benefits tax, exemptions and rebates) and video 3: groupings.

The harmonised videos are the result of efforts from each of the respective revenue offices.

While the content of this video is harmonised, there may be differences between the states and territories so where applicable the differences will be highlighted.

The information provided in this video is of a general nature if you have any specific queries please contact the applicable revenue office or seek independent professional advice.

You can find other helpful information resources and links to revenue offices at payrolltax.gov.au.

In this video we will first go through the differences of an employee versus a contractor and how to determine the correct amount to declare. Once the difference has been established we will look further into contractor provisions to understand the various contractor exemptions including which parts of the legislation are harmonised across the Australian states and territories. Lastly we will look at employment agent arrangements

During this video you will see different revenue rulings in the bottom left corner of certain slides. Revenue rulings provide guidance on how various revenue officers have interpreted the legislation and how they administer their relevant acts.

Employee or Contractor

Revenue ruling PTA38 provides information to assist you to determine if a worker is an employee or a contractor. Please note this revenue ruling is applicable for all states and territories except for Western Australia, which we will address shortly.

The contracted provisions can only be considered in a situation where a worker is a legitimate genuine contractor. This section will help you make that decision.

When making this decision you must look at the overall relationship between the worker and the business. There are situations where a worker is called a contractor but actually has all of the characteristics of an employee. In these cases, the worker is considered to be an employee for payroll tax purposes and all payments made to them are taxable.

An employee has an employment relationship with the employer which is called a contract of service. There is a mutual obligation on behalf of the employer and the employee. On the other hand, a legitimate contractor is engaged to provide specific services to a principal, this is a contract for service and the contractor would be running their own independent business.

It is important to remember that a contractor can be deemed an employee even if they provide their services via a company trust partnership or sole proprietorship.

So how do you determine if someone is an employee or a contractor? As previously mentioned, the following is applicable in all states and territories except for Western Australia.

You need to determine if the worker is an employee or a genuine independent contractor where exemptions may apply to determine this you will need to look at the totality of the relationship between the business and the worker. No one single factor is more or less important than another.

Let's have a look at some of the factors used to make a determination:

control and direction

How much control does the business have over the service that is provided? This could include who what when and how the job is performed the business doesn't need to monitor everything.

However you need to identify if the business is able to influence a certain level of control commercial risk who has the licences and insurances. Does the business take on the risk or the worker entitlements? Does their business provide sick leave or annual leave? Who is paying superannuation to the worker?

tools material and equipment

Generally contractors should supply their own tools and equipment

power to delegate

Does the worker have the ability to delegate their tasks to another?

integration

Is the worker integrated into the business or is their work totally separate?

The term employee is not defined in the act, we get the definition from common law, which takes into account the factors we have just gone through. Familiarise yourself with revenue ruling PTA38 which will help guide you when making your employee or contractor determination.

Is the worker an employee?

Following the flow chart shown on the screen an employing business should ask the following questions about each of their workers

Is the worker an employee?

If yes, any payments are payroll taxable and the contractor provisions do not apply.

If no, does the contract include labour?

Payroll tax is a tax on labour so if there's no labour component to a contract there is no payroll tax due.

If the worker is not an employee and the contract includes the supply of labour, the next question to ask is - does an exemption apply?

If an exemption applies the payments are not taxable. We will cover exemptions later in this video.

If the answer is no, payments to the contractor are taxable using the formula on the next screen.

For contractor payments where no exemption applies, taxable wages is the total amount paid for the service labour less any GST and less any approved deductions.

The approved deductions represent any non-labour components of a contract such as tools materials or equipment provided by a contractor. These standardized deductions were set by the revenue offices after consultation with employers and industry and cover various classes of contracts. Revenue ruling PTA18 provides a list of these approved deductions.

If an employer believes they are entitled to a higher deduction than those set in PTA18 they, or their relevant representative, must apply in writing to the relevant state or territory for a determination. Revenue ruling PTA19 sets out the process for doing this.

If you are an employer in Western Australia there are differences you need to be aware of as Western Australia is not harmonised in regards to contractors. Please refer to WA's revenue website.

Contractor exemptions

Let's now look at contractor exemptions.

There are a number of contractor payments that are exempt from payroll tax. If any one of these exemptions applies to your business circumstances you can claim a payroll tax exemption for those contractor payments.

There are three specific exemptions and six general exemptions. It is important to remember that you only need to satisfy one type of exemption for the contract to be exempt from payroll tax.

Three specific exemptions

The three specific exemptions are

• owner drivers
• door-to-door sales agents and
• insurance sales agents

Owner drivers

The owner driver exemption is a very specific exemption where the main purpose of the contract is for the transportation and delivery conveyance of goods. The contractor must use their own vehicle or lease the vehicle used. The employer must not own or lease the vehicle or make contributions whether directly or indirectly to the capital or running expenses of the vehicle. Please note this exclusion is not applicable to push bike couriers. Please refer to revenue ruling PTA6 for further information on the owner driver exemption

The following two exemptions do not apply in the Northern Territory, New South Wales or Western Australia.

Door-to-door sales

The door-to-door sales agents applies to contractors who are not employees who sell domestic goods and the sale of the goods takes place at the purchaser's home. Please refer to revenue ruling PTA7 for more information on the door-to-door sales exemption.

Insurance sales agents

The insurance sales agent's exemption applies to insurance companies that hire contractors to sell insurance on a commission basis. Commission paid to these contractors are exempt from payroll tax. Remember they must be genuine independent contractors and not employees.

Six general exemptions

There are also six general exemptions. These are:

• 90 day
• 180 day
• contractors engaging others
• services and salary to supply of goods
• services not ordinarily required
• and contractors who ordinarily perform
• services to the public

180 day exemption

The first general exemption is 90 days. If a contractor provides services that are the same or similar to services provided by the principal for no more than 90 days in a financial year, the payments are exempt specifically where the contractor provisions apply.

The principal is deemed to be the employer the worker is deemed to be the employee and the payments made to the worker are deemed to be wages unless one of the exemptions apply

Please remember that the carrying out of any work on a given day constitutes a day's work and the day's work do not have to be consecutive, it is the total number of days worked during the financial year that is relevant.

Once the 90 day limit is exceeded the total payments made to that contractor during the financial year including payments made for the work performed in the first 90 days is subject to payroll tax, unless another exemption applies.

For example, new homes proprietary limited engaged a plasterer to complete work on an apartment block. The days were not consecutive as it depended on when the apartments were ready. The plasterer worked for a total of 70 days. Therefore, payments under this contract are exempt from payroll tax

Please refer to revenue ruling PTA35 for more information on this exemption.

180 day exemption

The next exemption we will now look at is the 180-day exemption.

It is important to point out that it is not an extension of the 90-day rule we just covered, the 180-day exemption focuses on where a type of service is required by the principal for less than 180 days a financial year. The service may be supplied by contractors and or employees.

If that service is required for less than 180 days in a financial year, payments to all contractors providing that service are exempt.

You need to consider one that the service may have been provided by multiple contractors but also needs to include days the service was provided by employees and the days for which the type of service is required do not have to be consecutive. It is the total number of days for which a particular type of service is provided during the financial year that is relevant.

We have found the most common application for this exemption is with seasonal workers. For example, a winery engages a number of great pickers at the commencement of the vintage, the pickers were utilised for a total of 110 days. The winery has no requirements for pickers at any other time of the year and has no permanent pickers employed.

As the business only needs the pickers for less than 180 days any payments to these contractors are exempt for payroll tax.

Please refer to revenue ruling PTA20 for more information

Contractors engaging others

The next exemption is when the contractor engages others where a contractor engages others to complete work that is part of the contract. Those payments are exempt.

To satisfy the requirements of this exemption the additional labour must be hired by the contractor not the principal itself.

For example, Peter is a plumber. He enters into a contract with a client's business to carry out plumbing work. He performs the plumbing work which is the object of his contract. Peter's spouse Jill also attends some work flights with Peter. Jill attends to assist with providing quotes and other admin bookkeeping duties.

As the work that Jill performs does not relate directly to the work required by the contract, the business in this case cannot exempt the payments to Peter under this exemption category.

In another example, Samantha is an electrician she enters a contract with a client's business to install electrical items in a room and restore the walls to their original state. To perform the work required under the contract she engages a plasterer and a painter directly. The work performed by the plasterer and painter is considered part of the object of the contract and the contract with Samantha is exempt from payroll tax.

Please refer to revenue ruling PTA23 for more information on this exemption.

Services ancillary to supply of goods

The next exemption is when services are ancillary to the supply of goods.

When the purpose of the contract is for the provision of materials and or equipment and labour is only a small component, the contract may be exempt from payroll tax.

For example, a business needs the services of a crane. A condition of the contract is that a crane operator is provided but the principal purpose of the contract is the crane despite the operator being provided.

Any amount paid under the contract, including any amount paid to the operator, are exempt from payroll tax.

Alternatively, where the criteria is not satisfied for this exemption an employer may be entitled to a deduction depending on the profession of the contractor. Revenue ruling PTA18 outlines the percentage of the total payment that may be exempt, for example 30% deduction for brick layers, 25% deduction for carpet layers and 5% deduction for engineers.

Refer to revenue ruling PTA33 for more information in regards to this exemption and revenue ruling PTA18 for a list of all contractor deductions.

Services not ordinarily required

Our next exemption relates to services not ordinarily required.

Contractor payments made for services not associated with a principal's mainstream activities and are of an ad hoc nature are exempt.

For example, a bank engages a plumber to do plumbing work and this plumber provides these services to the public in general. In this scenario payment to the plumber contractor would be exempt. On the other hand, if XYZ limited provided a contractor to a bank to work as a teller this is a service normally required by the bank and therefore this exemption would not apply in that instance.

Please refer to revenue ruling PTA22 for more information on this exemption.

Because the contractor legislation is very broad there are cases where none of the previous exemptions apply but the genuine contractor is providing services to other businesses. The intent of the legislation is not to capture these.

Services are performed by a contractor who ordinarily performs services of that kind to the general public

Our last exemption is when services are performed by a contractor who ordinarily performs services of that kind to the general public.

In this situation the contractor should not be relying on one principal business as its sole source of income.

To assist businesses with the application of this exemption where the two criteria are met in a financial year the exemption can be applied. These criteria are

• if the contractor provides services to two or more principals which are not members of a group throughout the year and
• the contractor worked an average of 10 days or less per month for the principal excluding the months in which no services were provided

Revenue ruling PTA21 - Further factors that should be considered if the two criteria mentioned are not satisfied. Refer to the relevant revenue office for the revenue ruling.

If you feel an exemption under this category could still apply you need to apply to the Commissioner for a determination.

Employment Agents

Let's now look at employment agents.

An employment agency contract is defined in payroll tax legislation as a contract under which a person, being the employment agent, procures the services of another person, being the service provider, for a client of the employment agent.

If the business procures the service of a service provider for a client the arrangement is regarded as an employment agency contract. The business that procures the service is deemed the employer and the service provider is deemed the employee.

The payments made to the service provider are deemed wages for payroll tax purposes. It is important to note that employment agents reporting taxable wages for payroll tax are not entitled to any contractor exemptions or non-labour deductions we have spoken about previously in this presentation.

Please note that PTA27 is not adopted in Queensland.

Employment agents - Chain of on-hire

it is possible to have more than one employment agent creating a chain of on hire, where each employment agent in the chain may be liable to payroll tax for amounts paid or payable under the arrangement.

To prevent double taxation our revenue offices, deem the agency closest to the client to be the liable party.

In this example, business X, the client, engages employment agent 2. As employment agent 2 does not have the service providers with the relevant skills they engage employment agent 1 to procure service providers with the relevant skills.

Therefore, any wages paid by agent 2 is liable for tax. The dashed line indicates the second employment agency contract where agent 2 procured the service provider through agent 1 for their client business X.

End

That brings us to the end of today's video.

If you would like to know more the harmonised payroll tax website payrolltax.gov.au provides plenty of useful information on harmonised payroll tax matters.

Should you have any queries as a result of the information presented in today's video, please contact the relevant revenue office via the websites currently displayed on your screen.

Intro

Welcome to today's video payroll tax groupings.

For those of you who are new to payroll tax or if you just like a refresher, this video will assist you with the payroll tax treatment of grouped businesses.

Payroll tax videos

This video is the final in our three-part series on payroll tax. We recommend you also view the other videos for further information on payroll tax. They are video 1: understanding the basics (allowances, fringe benefits tax, exemptions and rebates) and video 2: contractor provisions and employment agents.

The harmonised videos are the result of efforts from each of the respective revenue offices.

While the content of this video is harmonised, there may be some differences between the states and territories so where applicable the differences will be highlighted.

The information provided in this video is of a general nature if you have any specific queries, please contact the applicable revenue office or seek independent professional advice.

You can find other helpful information resources and links to revenue offices at payrolltax.gov.au.

In this video we will look at the effects of payroll tax grouping provisions and then examine when a payroll tax group exists. We will also cover the Commissioner's discretion to de-group an employer, online registration and group deduction entitlement.

Effect of the grouping provisions

When two or more businesses are related or connected, they will be grouped together for payroll tax purposes and payroll tax will be determined on the total wages paid by the group related. Businesses are grouped regardless of which state they operate from, for example a group can consist of Victorian, South Australian and Tasmanian businesses.

Three important effects of grouping are:

1. Single deduction for the group each group is entitled to only one deduction in each state or territory and is claimed by the designated group employer (DGE). The group nominates which employer will be the DGE. All other grouped employers in that jurisdiction pay payroll tax on all taxable wages. For groups that employ in multiple jurisdictions, the designated group employer may vary from state to state.

   second

2. The group deduction entitlement is based on the group's Australian taxable wages. The deduction entitlement in each state depends on the percentage of the Australian wages paid in that jurisdiction

   and third joint and several liability

3. All current members of a group, whether or not they are employers, are jointly and severally liable for the debts of the group, therefore if one member has a payroll tax debt that amount can be recovered from any of the other group members.

Now let's look at the reasons why a business may be grouped with another business

When does a payroll tax group exist?

There are six different ways in which a payroll tax group can be formed, I'll go into more detail on the coming slides.

• First are related corporations. Put simply this is where a company controls another company.
• Second is common employees, where employees are shared between multiple businesses.
• Third is for groups of commonly controlled businesses. This occurs where the same person or group of people control two or more businesses.
• Fourth we have indirect relationships. This also relates to situations where people are controlling multiple businesses however the relationship between those people are indirect.
• Fifth is the tracing of interests. An entity with a direct indirect or aggregate controlling interest in a corporation will be grouped with that corporation.
• Sixth is amalgamation. Where multiple groups with common members are combined to form a larger group.

Let's take a look at the six grouping methods in more detail first.

Related corporations

Let's look at related bodies corporate. As per section 9 of the Corporation's Act which states related body corporate in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50.

If a company has a controlling interest in one or more other companies, they all form a payroll tax group. This group type includes corporations in a direct holding or subsidiary relationship, as well as corporations with the common holding company or common ultimate holding company.

It is very important for a subsidiary company to be aware of the overarching structure of their parent company and any other related companies.

One last important point to note about this grouping provision is that the holding company does not have to be an Australian company or based in Australia for its Australian subsidiaries to be grouped as related bodies corporate.

This is the only group type where the Commissioner of the relevant state or territory revenue office has no discretion to exclude a member from a group, more about this later.

Corporations are related if any of the following apply:

• One corporation controls the board composition of another corporation.
• One corporation can control more than 50 percent of votes in a general meeting of another corporation.
• One corporation holds more than 50 percent of the share capital of another corporation.

Let's look at an example of related bodies corporate. In this example A corporation forms a group with both B corporation and C proprietary limited because A has a controlling interest greater than 50 percent of both B and C.

B, D, and E also form a group because B has a controlling interest of both D and E. C and F do not form a group as C does not have a controlling interest in F.

A, B, C, D and E form an overall group because A is the common ultimate holding company.

A group under this provision is a mandatory group which means the Commissioner of the relevant state or territory revenue office has no discretion to exclude a member of related bodies corporate, even if the business carried on by that corporation is independent of and not connected with the business of other corporations in the group. The only exception to this rule is where a corporation only acts as a trustee of a trust and does not trade in its own right, even if it is a holding or subsidiary relationship with another corporation.

Any Australian company owned or controlled by an overseas parent company should contact the parent company to determine whether there are any other subsidiary companies operating in Australia. If so, the Australian subsidiaries will form a related bodies corporate group.

Common employees

The second way a group can be formed is where two or more businesses have an agreement to share employees. We call this into use of or common employees.

An employer will be grouped with the person or persons carrying on another business or businesses where one or more employees of the initial employer perform duties for any other businesses carried on by that employer, either solely or in partnership, or are employed solely or mainly to perform duties for another business or businesses, or where those employees perform duties for any other business or businesses as part of an agreement or arrangement by the first employer to provide those services.

Unlike related bodies corporate, section 79 of the Payroll Tax Act allows the

Commissioner of the relevant state or territory revenue office to exclude businesses from this type of payroll tax group under certain circumstances.

Let's take a look at a very simple example of common employees. Here we have two businesses, the business on the left provides administration services, the business on the right is a manufacturing company and their employees produce widgets.

The two businesses have an agreement where the employees of the XYZ administration services also provide administration services to CDE manufacturing. These two businesses form a payroll tax group because they inter-use employees.

This group type can impact professional practices such as legal accounting or medical practices that operate from the same premises and use the same administrative services business to provide reception admin support and so on. In this case there are common admin employees being used by all the professional practices technically forming a payroll tax group, however revenue ruling PTA17 states that professional practices and an administration services business will not be grouped where:

• all the owners or operators of the professional practices have no direct or indirect proprietary interest in any of the other professional practices and/or a controlling interest in the admin services business and
• the practices are independent and unconnected from each other and
• the admin services business does not derive more than 60 percent of its income from any of the professional practices and
• there is no suggestion of intent to avoid payroll tax.

Commonly controlled businesses

Let's move to the next way a payroll tax group can be formed, common control.

This group exists where a person or a set of persons together have controlling interest in two or more businesses and this is what ties the group together, however it is the entities actually conducting the businesses that are grouped, even if they are not the people with the controlling interest in the businesses.

This group type differs from related bodies corporate because any type of entity can be grouped including corporations with incorporated or unincorporated bodies trusts, partnerships or sole traders.

This is the second group type where the Payroll Tax Act allows the Commissioner of the relevant state or territory revenue office to exclude businesses under certain circumstances.

So, what constitutes control first corporations or companies?

Where a business is conducted by a corporation a person or set of persons would have a controlling interest if:

• they can exercise or influence more than 50 percent of the voting power attached to any class of issued voting shares of the corporation or
• they are the director of that corporation and can exercise more than 50 percent of the voting power at a director's meeting or can control the other director's votes

Next businesses conducted by either an incorporated or unincorporated body. Any person or set of persons who form more than 50 percent of the board of management of that body has control of that business.

Where a business is conducted by a trust, any individual or group of people who are beneficiaries of more than 50 percent of the value of the interests in the trust control. That trust interests include among other things entitlements to profits or capital distributions. In the case of a discretionary trust any beneficiary is deemed to have control of that trust regardless of what the trust deed says.

Control of a partnership is where a person or set of persons together own more than 50 percent of the capital of the partnership or are entitled to more than 50 of profits of the partnership whether beneficial or not.

Finally, where a business is conducted and owned by one person as a sole trader that person has total control. This also includes the group of people who are sole owners of the business as trustee.

Considering what we just covered if you meet any of these definitions, you are deemed to have a controlling interest in your business and if you are deemed to have a controlling interest in two or more businesses then it is likely you would form a payroll tax group.

Here's an example of common control.

First we have Blue Unit Trust with three unit holders Fred with a 40 percent share, Mary with a 40 percent share and Tony with a 20 percent share. Individually none of them holds a controlling interest in Blue Unit Trust as each has less than 50 percent interest, however Fred and Mary together hold an 80 percent share in Blue Unit Trusts which constitutes a controlling interest.

We can also see that Fred and Mary each have a 50 percent interest in ABC partnership. Once again neither of these individually have a controlling interest in the partnership remember it needs to be greater than 50 percent, however together they control 100 percent of the partnership.

Based on this information Fred and Mary together have common control of both Blue Unit Trust and ABC partnership so both these two businesses form a payroll tax group.

Indirect relationships

A controlling interest for payroll tax purposes does not need to be direct and groups can also be formed by certain indirect relationships that have controlling interests. If corporations are related under section 50 of the Corporations Act a corporation is deemed to have controlling interest in any business in which a related corporation has a controlling interest.

In the example on your screen Second Co Proprietary Limited is a subsidiary of Sarah Holder Proprietary Limited so they are related under section 50 of the Corporations Act. Second Co also has a controlling interest in The Alternative Partnership, this means that Sarah Holder Proprietary Limited is deemed to also have a controlling interest in The Alternative Partnership.

In addition, Sarah Holder Proprietary Limited has a controlling interest in The Business Partnership.

All the entities in this example form one payroll tax group.

The second indirect interest scenario is where a person has a controlling interest in a business and the person who carries on that business has a controlling interest in another business. In these cases, the first person is deemed to have a controlling interest in the second business.

For example, Ian Greene has a controlling interest in Company A, and Company A has a controlling interest in Partnership B. Ian Greene is deemed to have a controlling interest in Partnership B via his controlling interest in business A.

The third scenario involves a trustee of A Trust having a controlling interest in a business any beneficiary of that trust who is entitled to more than 50 percent of the trust's interests is deemed to also have control of the trustee's business.

In the example on your screen the Robinson Family Trust is a discretionary trust of which Lucy Robinson is a beneficiary entitled to greater than 50 percent the trust interests which is a controlling interest.

Also, the trustee of the Robinson Family Trust, Trustee Co Proprietary Limited, has an 80 percent controlling interest in the business carried on by Trading Co Proprietary Limited. Therefore, Lucy is deemed to also have a controlling interest in the trustees business. Trading Co Proprietary Limited

The Payroll Tax Act allows the Commissioner of the relevant state or territory revenue office to exclude or de-group persons from this type of group under certain circumstances.

Tracing of interests

We will now look at tracing of interests under the tracing provisions.

An entity will be grouped with a corporation in which the entity has a controlling interest. A controlling interest exists if the entity has a direct interest, indirect interest or an aggregate interest in the corporation and the total of those interests exceeds 50 percent.

Let's take a look at some examples.

In the first example the entity on the left has an 80 percent direct interest in Corporation A. Corporation A has a 70 percent direct interest in Corporation B and Corporation B has a 40 percent direct interest in Corporation C.

This means that the entity on the left also has indirect interest in both Corporation B and C.

The value of entities indirect interest in Corporation B is 80 percent of 70 percent. When we multiply these together, indirect interest equals 56 percent the value of entities.

Indirect interest in Corporation C is 80 percent of 70 percent of 40 percent, when we do the sums this equals 22.4 percent indirect interest in Corporation C which is less than 50 percent.

Therefore, under the tracing of interest provisions entity forms a group with Corporations A and B because its direct interest in Corporation A and its indirect interest in Corporation B both exceed 50 percent. Corporation C does not form part of the group because entities indirect interest in corporation is less than 50 percent.

The second example shows that the entity has a direct interest in Corporation A of 25 percent and a direct interest in Corporation B of 40 percent. Both direct interests are less than 50 percent so on their own are not controlling interest, however entity also has an indirect interest in Corporation B via Corporation A of 25 percent multiplied by 50 percent equals 12.5 percent. So, entities aggregate interest in Corporation B is the 40 direct interest plus the 12.5 percent indirect interest, in sum this equals 52.5 percent which is a controlling interest.

Therefore, entity and Corporation B form a group. Under the tracing of interest provisions Corporation A is not part of the group as the entity has an interest of less than 50 percent.

The Payroll Tax Act allows the Commissioner of the relevant state or territory revenue offers to exclude or de-group members of this type of group in certain circumstances.

On the next two screens we will look at the amalgamation of groups this occurs where two or more groups exist and at least one member is common to each group. In these cases the groups will, subject to the Commissioner's discretion, be amalgamated and form one large group.

The example on this screen shows the first way in which this can happen. Group 1 on the left is made up of Company A and Company B. Group 2 on the right is made up of Company A and Partnership C.

As company A is the common member in both group 1 and group 2, these two groups will be amalgamated so that Companies A and B and Partnership C form one group.

The second example is where two or more members of a group together have a controlling interest in another business all the members of the group and the person or persons who carry on the other business will amalgamate into a larger group.

In the example on the screen Company A and Company B are a payroll tax group in addition Company A has a 25 percent interest in Company C, and Company B has a 30 percent interest in Company C. Together Company A and Company B have a controlling interest of 55 percent in Company C. Therefore, the three companies form a larger payroll tax group.

This is another group type where the Commissioner of state and territory revenue officers has discretion to de-group members in certain circumstances.

Commissioner's discretion

Now that we've covered the ways in which a group can be formed let's look in more detail at the discretion that the Commissioner of the relevant state or territory revenue office has to exclude or de-group a member by necessity.

The grouping provisions of the Payroll Tax Act are very broad in their application, so the act gives the Commissioner of the relevant state or territory revenue office discretion to exclude a member from a group in certain circumstances.

Revenue ruling PTA31 goes into a lot more detail regarding the Commissioner's discretion to exclude a member from a group.  You can find the ruling on the payroll tax Australia website.

Employers seeking to be excluded from a group must apply to the relevant revenue office. Information on how to apply for exclusion is included on the website for each revenue office.

Businesses can be de-grouped if it is found that the relationship between them is not continuous active and significant and any connection between the businesses are merely casual.

Grouping is one of the most complex elements of payroll tax and the implications of getting it wrong are often significant. If you have any concerns, please contact the relevant revenue office.

Remember Commissioner's discretion is not available for members that are related corporations within the meaning of section 50 of the Corporations Act, but it is available for groups formed as a result of use of common employees, commonly controlled businesses, tracing of interest, indirect relationships or amalgamation of groups with common membership.

The Commissioner can exclude a member of these groups if they are satisfied the business conducted by the member seeking exclusion is independent of and not connected with the business conducted by any other member of the group. When making this decision the Commissioner considers the nature and degree of ownership and control of the businesses the nature of the businesses and any other relevant matters.

Let's have a look at an example.

Here we have a payroll tax group consisting of five entities. The family trust has written to the Commissioner requesting to be excluded from the group. You can see on your screen in this instance the Commissioner would assess the relationship and connections between the businesses. If they are found to not be continuous active and significant, the family trust can be excluded from the group.

Let's take a look at some of those different elements that the Commissioner considers when deciding to exercise their discretion. All of these considerations are detailed in revenue ruling PTA31 which is available at the Payroll Tax Australia website.

First, we have trade between the businesses, the Commissioner would ask are transactions occurring between the businesses. If so, what is the purpose of these transactions, what is the level of trade between the businesses, do the purchases of one of the businesses constitute a large proportion of the sales of the other businesses and are these transactions conducted on normal commercial terms or are discounts provided.

Sharing of resources between businesses. Do the businesses share resources including premises, staff, management and accounting services? If there is sharing of resources, is there any charge made, if there is a charge is the charge reasonable given the type of resource shared and the level of sharing.

Common management of the businesses. Is the same person or persons responsible for the day-to-day operations of all the businesses in the group? If so, are the operating decisions for one of the businesses made after first considering the impact of those decisions on the other businesses, are the managers of the businesses controlled or obliged to follow the directions of another person or persons.

Common financial arrangements between the businesses. Do the businesses have common financial arrangements? Have the businesses sort finance as a group from a financial institution? If so, are there cross securities for arrangements between the businesses, are there loans between the businesses? If so, do written loan agreements exist, is a reasonable rate of interest charged on the loans and our regular repayments required.

Common customers of the businesses. Is there a relationship between the customers of the businesses? Do the customers of one of the businesses automatically become customers of the other group members? Do the businesses provide complementary services to customers?

Is there a connection between the nature of the businesses does one of the businesses add value to goods or services provided by the other businesses?

Finally, what is the extent of the connection between the business owners. Are they the same people or are they closely related?

These factors are just some of the more common issues the Commissioner considers when deciding whether to exercise discretion to exclude a member from a group. It is not an exhaustive list.

Each case is considered based on all the relevant facts.

If you are not certain about your group status, please contact the relevant revenue office.

Online registration and lodgements

Let's now look at registering for payroll tax and or changing your group status.

Each state and territory has its own online registration and lodgement requirements, particularly when it comes to registering and lodgements for payroll tax groups. In some jurisdictions group members are required to lodge separate returns, as such you must familiarise yourself with the lodgement system of any revenue office you pay payroll tax and submit returns as required by the legislative due dates.

Where an employer is grouped, they need to register for payroll tax if the group's Australia-wide taxable wages are above the threshold, even if their individual wages are below the threshold.

Change of status

A change of status occurs if:

• You become or stop being the designated group employer for a group.
• You become or stop being a group member
• An administrator receiver and manager or liquidator is appointed, or their appointment ceases.
• Cease to employ and do not intend to resume being an employer for the remainder of the year or next financial year.

If any of these events occur, you need to advise the relevant revenue office.

Group deductions

let's now look at group deduction entitlement.

As mentioned earlier a payroll tax group is only entitled to one deduction or tax-free threshold which is claimed by the designated group employer. The deduction amount is a portion based on the portion of total Australian group wages that are paid in the relevant state or territory.

To calculate the deduction for the group, divide the total group state or territory wages by the total group Australian wages, then multiply that fraction by the full state or territory deduction entitlement.

The example on your screen is for a group that employs in Victoria ends in other states and territories and assumes the group has employed for the full financial year.

The group's total Victorian wages for the year are 3 million and the group's total Australian wages for the year are 5 million. Three million divided by 5 million is 0.6. 0.6 multiplied by the full payroll tax threshold for Victoria gives a group deduction as shown on the screen.

If the group only employed for part of the year the deduction would be further apportioned based on the number of days the group employed during the financial year.

End

That brings us to the end of today's video.

If you would like to know more the harmonised payroll tax website payrolltax.gov.au provides plenty of useful information on harmonised payroll tax matters.

Should you have any queries as a result of the information presented in today's video, please contact the relevant revenue office via the website's currently displayed on your screen.

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Opening

Welcome to RevenueSA’s educational video series. This video is aimed at assisting businesses that are newly registered for payroll tax in South Australia.

In this video we will look at:

• How to calculate payroll tax;
• When payroll tax returns and payments are due;
• Payment methods available;
• Refunds; *
• How to update your contact details; and
• Where you can obtain further information.

How to calculate payroll tax

Payroll tax payable is based on your taxable wages.

Your taxable wages includes gross salaries and wages, allowances, leave payments, superannuation, bonuses and commissions, fringe benefits, termination payments, shares given to employees and directors fees.

The amount of tax payable is calculated using the formula shown on the screen.

Employers may be eligible for an annual deduction entitlement.

The annual deduction entitlement shown may be less than the amount displayed, if:

• you employ in South Australia and another state or territory; or
• you are a new organisation that only commenced part way through a financial year or if your organisation ceased to operate during the financial year.

If you are part of a group, only the designated group employer will receive the deduction entitlement.

As most employers lodge returns monthly, the annual deduction is divided by 12 to determine a monthly deduction amount.

This amount will be automatically deducted from taxable wages before tax payable is calculated.

When is payroll tax due?

If you have been placed on a monthly return cycle, you are required to lodge a return by the 7th of each month.

For example the March return is due by the 7th of April.

If the 7th falls on a weekend or a public holiday, returns may be lodged on the next business day.

If you are unable to pay it is important you contact RevenueSA before the due date to discuss options available to avoid or minimise penalties.

If your business has no payroll tax to pay for the month a Nil return must still be lodged.

At the end of each financial year, all taxpayers are required to lodge an Annual Reconciliation by 21st July.

For annual payers this is the only lodgment required for the year and will calculate your payroll tax due based on the years taxable wages. It will also tell you if no tax is due.

If you have not paid wages for the year, or the wages paid are below the threshold amount, you must still complete an annual reconciliation.

All payroll tax returns are lodged on RevenueSA Online. Online Help is available via the Help link in RevenueSA Online and educational videos are available demonstrating how to complete a monthly payroll tax return.

RevenueSA also conducts webinars in June and July for the annual reconciliation which provides some useful tips to assist you in completing your payroll tax annual reconciliation.

Payment methods

If you have registered for electronic payment authority (EPA), once you complete your return you can authorise for the payment to be deducted from your nominated bank account.

You can register for the electronic payment authority (EPA) at any time. Just fill in an application form available from RevenueSA’s website.

If you are not registered for electronic payment authority (EPA), other payment methods include EFT and BPay.

Refunds

There may be times when your business is due a refund. Refunds can be paid directly into your nominated bank account if you have completed the Payroll Tax Refunds via Direct Credit Application which is available from the RevenueSA website.

If you have not registered for electronic refunds, RevenueSA will post a cheque to your business if a refund is due.

Updating your details

It is important that you keep your contact details up to date.

These details are used by RevenueSA as a contact point for your organisation and correspondence will be sent to the details provided.

Want to know more?

For more information go to revenuesa.sa.gov.au and select Payroll Tax from the Taxes, Duties and Levies menu.

The payroll tax menu on the left provides you with a variety of information relevant to payroll tax including:

• Exemption rates for motor vehicle and accommodation allowance.
• A Contractor Decision Tool which will help you determine if payments to contractors are taxable.
• The Payroll Tax Guide to Legislation which provides more detailed information on what payments are liable, grouping and other payroll tax information.
• Information Circulars & Revenue Rulings cover a large number of individual payroll tax topics.

In addition to the information on our website we also conduct regular payroll tax webinars.

To register for a webinar or view an educational video, click on the relevant link in the Connect with Us section on the RevenueSA website.

End

That brings us to the end of this educational video.

If you require additional assistance please contact us.

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The maximum annual deduction entitlement available in South Australia is $600,000.

Employers are entitled to a deduction amount which is subtracted from their wages paid.

Let’s look at a simple example:

Business ABC employs only in South Australia and has taxable wages of $1.6m.

Their deduction entitlement is $600,000.

Payroll tax will be calculated on $1 million, that is $1.6 million - $600,000.

The annual deduction entitlement will be reduced if the employer:

• is part of a group;
• employs (or the group employs) in South Australia for part of the financial year; or
• Employs (or the group employs) in South Australia and another state and/or territory.

Part of a group

If you are a member of a group, only the Designated Group Employer (DGE) is entitled to claim the deduction entitlement.

If at the end of financial year the designated group employer has not used the groups full deduction entitlement they can allocate any unused deduction entitlement to one or more of the group members as part of the annual reconciliation process.

Employ for part of the financial year

As mentioned the deduction entitlement will be reduced if an employer did not employ for the full financial year.

You can see on the screen how the deduction entitlement may be adjusted for an organisation who only employs in one state or territory.

If the employer employs for a full financial year then they will be entitled to a full deduction entitlement. If the employer only employs for a portion of the financial year, the deduction entitlement will be adjusted based on the number of days they employed.

Employ in South Australia and another state and/or territory

If you employ in multiple jurisdictions your deduction entitlement will be adjusted.

The South Australian annual deduction entitlement is calculated by determining the proportion of the wages paid in South Australia divided by the total Australia wide wages which is then multiplied by South Australia’s maximum annual deduction entitlement, which is $600,000.

Let’s look at an example. South Australian Wages are $700,000 and the Australia wide wages are $2.1 million. As wages are paid in South Australia and interstate, the employer’s deduction entitlement will be adjusted. In this scenario, the employer would be eligible to claim an annual deduction entitlement of $200,000 in South Australia.

How do I find out what my deduction entitlement is?

RevenueSA Online will calculate your deduction entitlement based on the details provided in your annual reconciliation or if you have recently registered from the details provided at registration.

If you are on a monthly return cycle a monthly estimated deduction entitlement will deducted from your monthly total gross South Australian wages.

The monthly deduction entitlement is calculated by using the formula shown on the screen.

End

That brings us to the end of this educational video.

If you require any additional assistance please contact us.

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Welcome to RevenueSA’s educational video series. In this video we will look at how to calculate, lodge and pay a monthly payroll tax return.

This video is applicable to taxpayers who pay their payroll tax via an electronic payment authority (now referred to as direct debit).

Lodge a monthly return

Monthly payroll tax returns are due on the 7th of each month. For example your March return is due by the 7th of April.

Returns are accepted on the next business day when the 7th falls on a weekend or public holiday.

If you are unable to pay it is important you contact RevenueSA before the due date to discuss options available to avoid or minimise penalties.

Payroll tax return lodgement dates for the current financial year are available on RevenueSA’s website.

Monthly returns are lodged online using RevenueSA Online.

Your logon details have been provided to your organisation’s nominated administrators.

If you need assistance when using RevenueSA Online, a process guide on how to complete your monthly return is available from the Help link.

Select Monthly Returns from the Payroll Tax menu to lodge or view monthly returns.

Select the month you want to lodge a return for by clicking anywhere on that row.

Enter your wage component details for the month. If you have not paid any wages in a particular category, leave the field blank. Enter amounts in whole dollars only.

The estimated deduction entitlement will be populated automatically. You can change the deduction amount, but in most cases it will remain as calculated.

Once you have entered your wage components, the tax payable will be automatically calculated for the return period based on the estimated tax rate.

Review the information you have entered and the tax payable.

If you wish to save the calculation and authorise payment at a later stage, click on the Save button.

To proceed with the payment, select the Authorise Payment button.

The Payment Date field will default to today’s date. However, you can set your payment to be debited from your account on the due date.

For example, if you complete your July return on the 31st July you can enter a payment date between 31st July and the due date of the 7th of August.

Using this function will ensure that you pay on time and avoid receiving a penalty. This functionality can be useful if you are going on leave or have other work commitments on the due date.

Your nominated bank account will be displayed. If you have more than one nominated bank account, you can select it from the drop-down list.

To authorise the payment enter your password and click on Submit.

Once submitted, the summary details of your payment will appear.

A payment receipt will be created. Click on the link to open the receipt.

The Payroll Tax Return Declaration is displayed.

The payment will be automatically debited from your nominated bank account.

The payment will show under the Amount Paid column on the Monthly Returns screen.

What if I don’t have any payroll tax to pay for the month?

If you have no tax payable for the month a Nil return must still be lodged.

Simply follow the same steps as lodging a return. Once you have entered the wage components, if the tax payable displays zero, click on the Lodge Nil Return button and a nil return will be submitted to RevenueSA.

A message will display asking for you to confirm you are reporting zero (0) tax payable for the period.

Once confirmed a Payment Advice is created, click on the link to open the Advice.

The Payroll Tax Return Declaration for the return period will indicate no payment due.

Modify a Return

There may be circumstances where you need to modify a return, for example, you may need to update your wage details.

To modify a return, click on the month you wish to modify.

Your current return information is displayed. Any previous payments you have authorised for the return period will appear at the bottom of the screen.

Click on the Modify button.

Update wage components as required. The tax payable will be automatically recalculated.

Review the information you have entered and the tax payable.

This may result in you needing to make an additional payment. To proceed with the additional payment, select the Authorise Payment button.

Check the payment details including the payment date and bank account.

To authorise the payment, enter your password then click on Submit.

Once submitted the payment will be automatically debited from your nominated bank account and the summary details of your payment will appear at the bottom of the screen.

Click on the link to open the Receipt.

Alternatively, modifying your return may result in an overpayment. After updating your wage details ensure you click on the Save button.

If you have overpaid your monthly payroll tax, you have two options.

The first option, is to underpay the next month by the amount of the overpayment.

Alternatively, you can request a refund by emailing payrolltax@sa.gov.au with full details of the overpayment.

End

That brings us to the end of this educational video.

If you require any additional assistance please contact us.

[Music]

[Music]

Opening

Welcome to RevenueSA’s educational video series.

In this video we will look at how to calculate, lodge and pay a monthly payroll tax return.

This video is applicable to taxpayers who pay their payroll tax via EFT, BPay or cheque.

Lodge a monthly return

Monthly payroll tax returns are due on the 7th of each month. For example your March return is due by the 7th of April.

Returns are accepted on the next business day when the 7th falls on a weekend or public holiday.

If you are unable to pay it is important you contact RevenueSA before the due date to discuss options available to avoid or minimise penalties.

Payroll tax return lodgement dates for the current financial year are available on RevenueSA’s website.

Monthly returns are lodged online using RevenueSA Online.

Your logon details have been provided to your organisation’s nominated administrators.

If you need assistance when using RevenueSA Online, a process guide on how to complete your monthly return is available from the help link.

Select Monthly Returns from the payroll tax menu to lodge or view monthly returns.

Select the month you want to lodge a return for by clicking anywhere on that row.

Enter your wage component details for the month. If you have not paid any wages in a particular category, leave the field blank. Enter amounts in whole dollars only.

The estimated deduction entitlement will be populated automatically. You can change the deduction amount, but in most cases it will remain as calculated.

Once you have entered your wage components, the tax payable will be automatically calculated for the return period based on the estimated tax rate.

Review the information you have entered and the tax payable. If the information is correct, select the generate payment advice button.

A payment advice will be created. Click on the link to open the advice.

The payroll tax return declaration is displayed.

This payment advice provides 3 options for payment, EFT, BPay or by cheque. If paying by EFT or BPay, use the reference number shown on the payment advice. The reference number is unique to your monthly return and changes each month. Your payment will not be processed correctly if additional details are added to the reference such as the words Tax or the month.

If paying by cheque, please post the payment advice along with your cheque to the address provided.

What if I don’t have any payroll tax to pay for the month?

If you have no tax payable for the month a Nil return must still be lodged.

Simply follow the same steps as lodging a return. Once you have entered the wage components, if the tax payable displays $0 click on the Lodge Nil Return button and a nil return will be submitted to RevenueSA.

A message will display asking for you to confirm you are reporting zero tax payable for the period.

Once confirmed, a payment advice is created. Click on the link open the advice. The Payroll Tax Return Declaration for the return period will indicate no payment due.

Modify a Return

There may be circumstances where you need to modify a return, for example, you may need to update your wage details.

To modify a return, click on the month you wish to modify.

Your current return information is displayed.

Click on the modify button.

Update the wage components as required. The Tax Payable will be automatically recalculated. Review the information you have entered and the tax payable. If the information is correct, select the generate payment advice button.

A new payment advice is created and appears at the bottom of the screen.

If you have made previous payments for this return the modified return may result in you needing to make an additional payment. Additional payments are made using one of the payment options on the bottom of the payment advice.

Alternatively it may have resulted in an overpayment. If you have overpaid your monthly payroll tax you have 2 options. The first option is to underpay the next month by the amount of the overpayment. Alternatively, you can request a refund by emailing payrolltax@sa.gov.au with full details of the overpayment.

End

That brings us to the end of this educational video.

If you require any additional assistance please contact us.

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