By Tina Zawila
As a business owner in Australia, understanding your payroll obligations to keep your employees happy, and to ensure compliance with the Australian Taxation Office (ATO) is vital for your success.
Lately, we’ve noticed an increase in correspondence reminding employers of their responsibilities associated with Payroll Tax. Payroll tax is a state-based tax imposed on wages paid by employers when their total wages exceed a certain threshold. Each state and territory in Australia has its own payroll tax legislation, including different thresholds and rates.
In Queensland the threshold is $1.3 million per year ($25,000 per week), with a tax rate of 4.75% (or 4.95% for larger employers who pay more than $6.5 million in Australian Taxable Wages). Payroll Tax is managed by the Queensland Revenue Office.
Employers need to monitor their total wage bill to determine whether they exceed the relevant payroll tax threshold. Taxable wages include salaries, commissions, bonuses, superannuation contributions, and some contractor payments. If your business operates in multiple states, the threshold is proportionally allocated based on wages paid in each jurisdiction. Many states require businesses to lodge monthly payroll tax returns if their wages exceed a certain threshold. In Queensland, the focus is on the threshold of $25,000 per week.
It is worth noting that with Single Touch Payroll (STP) now in place, the regulators have access to information relating to your wages, tax and superannuation in real-time. So whilst you may think that Payroll Tax won’t apply to you based on the annual threshold, you should be considering your payroll tax obligations on a weekly (or at least monthly) basis rather than waiting until the end of the financial year. Not only will regular monitoring allow you to manage your taxation obligations and avoid unexpected liabilities, it will also enable you to easily respond to any queries from the regulators. Keeping accurate records and ensuring timely submissions can help businesses stay compliant and avoid penalties.
As always, we encourage you to seek professional advice tailored to your circumstances from your accountant and/or registered tax agent.
If you have any queries about your Payroll Tax obligations, please contact the professional team at UHY Haines Norton CQ on 07 4972 1300.
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