Payroll Tax Act 2011

This Act is the Payroll Tax Act 2011.

Note This Act is a tax law under the Taxation Administration Act 1999. As a tax law, this Act is subject to provisions of the Taxation Administration Act about the administration and enforcement of tax laws generally.

The dictionary at the end of this Act is part of this Act.

Note 1 The dictionary at the end of this Act defines certain terms used in this Act, and includes references (signpost definitions) to other terms defined elsewhere.

For example, the signpost definition ‘corporation—see the Corporations Act, section 9.’ means that the term ‘corporation’ is defined in that section and the definition applies to this Act.

Note 2 A definition in the dictionary (including a signpost definition) applies to the entire Act unless the definition, or another provision of the Act, provides otherwise or the contrary intention otherwise appears (see Legislation Act, s 155 and s 156 (1)).

This Act (other than the schedules) is numbered to maintain consistent part, division and section numbering with the Payroll Tax Act 2007 (NSW) (the NSW Act), including—

having a gap in part numbering if there is no equivalent in this Act of a part of the NSW Act; and

having a gap in section numbering if there is no equivalent in this Act of a section of the NSW Act; and

for a section that does not have an equivalent in the NSW Act—using a section number that is not used in the NSW Act.

Examples

1 There is no pt 8 or s 12 in this Act.

2 There is no s 53A in the NSW Act.

A note included in this Act is explanatory and is not part of this Act.

Note See the Legislation Act, s 127 (1), (4) and (5) for the legal status of notes.

Other legislation applies in relation to offences against this Act.

Note 1 Criminal Code

The Criminal Code, ch 2 applies to all offences against this Act (see Code, pt 2.1).

The chapter sets out the general principles of criminal responsibility (including burdens of proof and general defences), and defines terms used for offences to which the Code applies (eg conduct, intention, recklessness and strict liability).

Note 2 Penalty units

The Legislation Act, s 133 deals with the meaning of offence penalties that are expressed in penalty units.

Part 2 Imposition of payroll tax

Division 2.1 Imposition of tax

Payroll tax is imposed on all taxable wages.

The employer by whom taxable wages are paid or payable is liable to pay payroll tax on the wages.

The amount of payroll tax payable by an employer must be worked out in accordance with schedules 1 and 2.

However, for the financial year beginning on 1 July 2025, the amount of payroll tax payable by an employer must be worked out in accordance with schedule 2A instead of schedules 1 and 2, if the total wages paid or payable by the employer for the financial year are more than $150 million.

In this section:

total wages, for the financial year beginning on 1 July 2025—see schedule 2A (Special provisions for 2025-2026 financial year), section 2A.2 (4).

A person who is liable to pay payroll tax on taxable wages must pay the tax—

within 7 days after the end of the month in which the wages were paid or payable, other than June; and

within 28 days after the end of June in relation to taxable wages paid or payable in June.

However, if the commissioner believes on reasonable grounds that a person may leave Australia before any payroll tax becomes payable by the person, the tax is payable on the day fixed by the commissioner by notice served on the person.

Division 2.2 Taxable wages

For this Act, taxable wages are wages that are taxable in the ACT.

However, exempt wages are not taxable wages.

For this Act, wages are taxable in the ACT if—

the wages are paid or payable by an employer in relation to services performed by an employee entirely in the ACT; or

the wages are paid or payable by an employer in relation to services performed by an employee in 2 or more Australian jurisdictions, or partly in 1 or more Australian jurisdictions and partly outside all Australian jurisdictions, and—

the employee is based in the ACT; or

if the employee is not based in an Australian jurisdiction—the employer is based in the ACT; or

if both the employee and employer are not based in an Australian jurisdiction—the wages are paid or payable in the ACT; or

if both the employee and employer are not based in an Australian jurisdiction and the wages are not paid or payable in an Australian jurisdiction—the wages are paid or payable in relation to services performed mainly in the ACT; or

the wages are paid or payable by an employer in relation to services performed by an employee entirely outside all Australian jurisdictions and are paid or payable in the ACT.

Note Section 66A (Wages paid or payable in relation to services performed in other countries) provides an exemption for wages paid or payable in relation to services performed entirely in 1 or more other countries for a continuous period of more than 6 months.

The question of whether wages are taxable in the ACT must be decided by taking into account only the services performed by the employee in relation to the employer in the month in which the wages are paid or payable.

Any wages paid or payable by an employer in relation to an employee in a month are taken to be paid or payable in relation to the services performed by the employee in relation to the employer in that month.

Example

If wages paid in a month are paid to an employee in relation to services performed over several months, the question of whether the wages are taxable in the ACT must be decided by taking into account only services performed by the employee in the month in which the wages are paid. Services performed in previous months are disregarded (services performed in previous months will be relevant to the question of whether wages paid in the previous months are taxable in the ACT).

However, if no services are performed by an employee in relation to an employer in the month in which wages are paid or payable in relation to the employee—

the question of whether the wages are taxable in the ACT must be decided by taking into account only the services performed by the employee in relation to the employer in the most recent prior month in which the employee performed services in relation to the employer; and

the wages are taken to be paid or payable in relation to the services performed by the employee in relation to the employer in that most recent prior month.

Also, if no services were performed by an employee in relation to an employer in the month in which wages are paid or payable in relation to the employee or in any prior month—

the wages are taken to be paid or payable in relation to services performed by the employee in the month in which the wages are paid or payable; and

the services are taken to have been performed at a place or places where it may be reasonably expected that the services of the employee in relation to the employer will be performed.

All amounts of wages paid or payable in the same month by the same employer in relation to the same employee must be aggregated for the purpose of deciding whether they are taxable in the ACT (as if they were paid or payable for all services performed by the employee in the month in which the wages are paid or payable, or the most recent prior month).

Example

If 1 amount of wages is paid by an employer in a particular month for services performed in the ACT, and another amount of wages is paid by the same employer in the same month for services performed by the same employee in another Australian jurisdiction, the wages paid must be aggregated (as if they were paid for all services performed by the employee in that month). Accordingly, s (1) (b) would be applied for the purpose of deciding whether the wages are taxable in the ACT.

If wages are paid in a different month from the month in which they are payable, the question of whether the wages are taxable in the ACT must be decided by taking into account the earlier of the relevant months.

For this Act, the jurisdiction in which an employee is based is the jurisdiction in which the employee’s principal place of residence is located.

The jurisdiction in which an employee is based must be decided by taking into account the state of affairs in the month in which the relevant wages are paid or payable.

If more than 1 jurisdiction would qualify as the jurisdiction in which an employee is based in a month, the jurisdiction in which the employee is based must be decided by taking into account the state of affairs on the last day of that month.

For this Act, an employee who does not have a principal place of residence is taken to be an employee who is not based in an Australian jurisdiction.

For wages paid or payable to a corporate employee, the jurisdiction in which the employee is based must be worked out under section 11B instead of this section (as if a reference in section 11B to an employer were a reference to an employee).

For this section, a corporate employee is a company—

that is taken to be an employee under section 34 (Contractors—people taken to be employees) or section 39 (Employment agents—people taken to be employees); or

to which a payment is made that is taken to be wages payable to an employee under section 42 (Employment agents—agreement to reduce or avoid liability to payroll tax) or section 47 (Agreement etc to reduce or avoid liability to payroll tax).