1. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 1 Payroll Tax Chapter 9

2. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 2 OVERVIEW OF PAYROLL TAX Each State (and territory) has its own payroll tax legislation. Payroll tax is a State tax paid by large employers operating within each State. The prescribed rate of State payroll tax is applied to the gross taxable wages paid or payable by employers above the State threshold.

3. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 3 Defining Taxable Wages Payroll tax is based upon the annual taxable wages paid or payable by an employer to employees in the annual period from 1 July to 30 June. Wages refer to cash payments as well as payments in lieu of cash.

4. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 4 Ordinary time wages and salaries. Overtime, commissions, bonuses. Director’s fees. Taxable value of fringe benefits. Leave entitlements paid to continuing employees. Accrued sick leave, annual leave and annual leave paid as lump sums on termination of employment. Employer superannuation contributions. Taxable Wages for Payroll Tax Single employers based and operating within one state pay payroll tax only on total taxable wages paid in their relevant state Special rules apply for calculating total annual taxable wages of employers paying wages in more than one State.

5. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 5 There is a different tax-free threshold amount applied in each State. When the threshold is exceeded, an employer must pay the relevant State tax. REGISTRATION OF EMPLOYERS Payroll tax rates Registration procedures Employers are required to register for payroll tax once they reach the relevant weekly or monthly threshold in any one month.

6. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 6 Once registered, employers must self-assess their monthly payroll tax liability. Payment must be sent with a monthly payroll tax return to their State payroll tax office. These are due 7 days after the wages month. Monthly returns are submitted for the first eleven months of each financial year. An annual return must also be lodged by 21 July each year. PAYING PAYROLL TAX Monthly returns

7. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 7 An annual return must be lodged by 21 July each year. This return reconciles monthly tax payments for the first 11 months of the year with any annual tax liability. This based on total annual wages. Any shortfall is paid with the annual return and any overpayment calculated is refunded by the payroll tax office. PAYING PAYROLL TAX Annual returns Small employers liable for payroll tax may apply for one annual return.

8. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 8 To calculate monthly payroll tax payable Calculating payroll tax If monthly taxable wages exceed the equivalent monthly threshold, the payroll tax is the prescribed amount of the excess. (Each area has its own rate.) divide the threshold by 12 New South Wales, Victoria, South Australia, Tasmania and the ACT Queensland and Western Australia Taxable wages are reduced proportionately if they exceed a threshold amount up to a maximum ceiling amount.

9. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 9 RECORDS REQUIRED Time and wage books. Other records of wage payments. Records required to be kept Relevant records must be retained for 5 years after the transaction occurs

10. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 10 OFFENCES AND PENALTIES Various offences and maximum penalties exist under State payroll tax legislation.

11. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 11 Discusses Stamp Duty CHAPTER 10