Non taxable payments
The Payroll Tax Act 2008 exempts the following payments from payroll tax:
- motor vehicle and accommodation allowances paid at rates that do not exceed the statutory exemption limits;
- direct reimbursements;
- workers compensation;
- adoption/maternity leave;
- trust distributions paid in lieu of wages;
- wages paid to employees involved in voluntary work or emergency relief work; and
- wages paid to an indigenous person employed under the Community Development Employment project.
Wages paid to an employee on adoption or maternity leave will be exempt from payroll tax. The exemption is limited to wages paid or payable in respect of a maximum of 14 weeks’ maternity leave (including an equivalent period of leave at a reduced rate of pay), for any one pregnancy or adoption.
Paternity leave payments are subject to payroll tax.
Paid parental leave
The Paid Parental Leave scheme entitles eligible working parents who are primary carers of a child born or adopted on or after 1 January 2011 with a maximum of 18 weeks of government funded parental leave pay at the National Minimum Wage.
Even though these payments are paid by employers, the Commissioner of State Revenue is of the view that they do not constitute wages under the Payroll Tax Act 2008 as they are not paid by the employer for services provided by the employee (or in anticipation of future services to be provided by the employee). They are Commonwealth Government payments that employers are asked to pay on its behalf.
Employees involved in voluntary work or emergency relief work
Wages paid to employees will be exempt where the employees are:
- taking part in bushfire fighting activities as volunteer members of the fire brigade; or
- engaged in emergency operations or rescue and retrieval operations as a volunteer member of an emergency services organisation.
Community Development Employment Scheme
Wages paid to an indigenous person employed under a Community Development Employment Project funded by the Commonwealth Government are exempt from payroll tax.