Pay-roll taxes have been introduced by all state and territory legislatures and, although there are elements of consistency in the broad operation of the laws, each jurisdiction has various differences. For example:
- The rate of pay-roll tax varies from 4.75% in Queensland to 6.85% in the ACT.
- Exemption thresholds vary between jurisdictions
- The definition of “taxable wages” varies between jurisdictions
- The treatment of particular taxpayers such as labour hire companies and local government varies
- Some jurisdictions provide industry assistance in relation to the tax
Following the trend of tax complexity in Australia, this tax is complex. In fact, many of our clients have identified their exposure to this tax as one of their highest risks.
As a result, we are regularly commissioned to provide a prudential audit of their compliance. Not only odes this service reduce the risk of non-compliance, areas of tax reduction have been identified and have provided these businesses with pricing competitive advantages.