Payroll Tax – Here’s Everything You Need To Know

By Author: Lester Ong
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Payroll tax refers to the state tax assessed on the wages paid by employers. This tax varies across states and territories. So, it might not be easy to determine how much you owe, when you have employees working at different locations around the country. To get a clear understanding of how payroll taxes work and how is this paid, this simple guide from a tax law firm in Perth will help you gain a better understanding on the same

Taxes –The Basics

- Payroll tax payable by your business will depend on the state or territory it’s located in, or where the employees work from. Each state will have their own predetermined rates and regulations businesses must comply with.

- Not every business should pay this tax though. According to a taxation lawyer in Perth, payroll tax is only applicable for those employers when their total Australian taxable wages exceed ...
... a specified threshold amount. The said threshold will also vary by state and territory.

- The payroll tax should be paid by the employer. A percentage is withheld from the employee’s wages, and is paid to the Australian government based on the current rates applicable in the state.

- An employee’s income will include the salary/wages based on the number of hours worked, sales commissions, allowances, fringe benefits, contractor payments, and any bonuses paid by the employer.

Employees Present in More than a State:

If your business has employees present in more than a state or territory, check whether the total Australian wages exceed the payment thresholds set by the state or territory. If that’s the case, an expert tax lawyer in Perth states that you should register in each state and territory.

The threshold amount is usually reduced when you have employees from more than one state. Even when the wages you pay in an individual state is below the threshold for the said state, you should still pay the payroll tax if the combined Australian wages exceed the threshold.

For instance, you pay $900K in wages in Queensland, and $1 million in wages in South Australia. The combined wages will be $1.9 million. Since this total exceeds the payment threshold of $1.3 million in Queensland, you should pay the payroll tax in this state.

What is Needed to Register for Payroll Tax?

Furnish the following details during the registration process:

- Your Australian Business Number (ABN)

- Employee wages paid in each state or territory

- Total Australian wages for the financial year

- If you belong to a group of employers, provide the total state/territory wages, and total Australian wages.

- Estimate of next year wages

Be informed that the application process will vary based on the state and territory.

If you have any further queries in payroll tax, or require assistance in payment or management of payroll tax, talk to a recognised tax law firm in Perth today.

The author is a certified tax lawyer in Perth who has assisted businesses in dealing with payroll taxes. In this article, he explains the fundamentals of payroll tax for his readers. To know more, visit https://www.munrodoig.com.au/

Founded in 2002, by its directors Colin Munro and Ron Doig, Munro Doig Lawyers is a leading law firm based in Perth, Western Australia. We have extensive experience in the areas of tax, superannuation, succession, intergenerational wealth transfer, estate planning and commercial law. Our clients include high-net worth individuals and small-medium enterprises. We are also leaders in migration law (assisting clients with visa applications through to appeals and solving complex and difficult migration problems). Munro Doig Lawyers is committed to providing first-class assistance, trustworthy advice and strategic solutions. We maintain long-standing relationships with our clients; we think outside the box and provide leading-edge solutions. We look forward to helping you. Call us on 08 9426 6222 or visit http://www.munrodoig.com.au to find out more!