Contracts where services are performed by one contractor on no more than 90 days in total during a financial year (refer to section 32(2)(b)(iii) of the
Payroll Tax Act 2008)
This provision excludes payments to contractors who are generally employed for a short term by the same employer in one financial year. However, if the contractor performs similar services for the same employer under a different contract arrangement, the total days worked by the contractor under one or more relevant contracts must be included in counting the total number of days worked.
- If a person contracts as a concreter in the first instance and as a cement mixer operator in the second, but is providing the same services, then both terms of services must be included; or
- If ‘Alpha Pty Ltd’ provides services in July and August and ’Beta Pty Ltd’ provides similar services in November and December, and the persons actually performing the work are the same, then these periods must be aggregated.
Where a contractor has performed services for 80 days only, the contract is excluded at that point. However, if a further 11 days’ work are performed by the same person later in the same financial year, the contract can no longer be excluded and payroll tax is payable on all payments relating to the full 91 days.
In these circumstances employers are only required to declare these payments on a monthly basis when 90 days is exceeded and not amend previous monthly returns. However, the aggregate total of payments must be included in the Annual Adjustment Return as contractors.
The word ‘days’ refers to the number of days on which work is performed. The number of hours worked each day is not relevant. That is, if only two hours are worked on one day then this must still be counted as a ‘day’.