Further information on Payroll Tax Exemption changes

05 December, 2017

Following the announced changes to the Payroll Tax Exemption by the WA Treasurer and the Minister for Education and Training last week, there is now further information available on the following commonly asked questions:

 

Are apprentices impacted by these changes?

No. The payroll tax exemption for wages paid to apprentices will not be affected by these changes.

 

When will these changes take effect?

The Government will introduce a Bill into the Parliament in 2018 to amend the Payroll Tax Assessment Act retrospectively to 1 December 2017.

While these changes have not been made law yet, the Office of State Revenue is encouraging employers to declare wages paid to affected trainees as taxable wages in their December 2017 return onwards. 

Circular 10: Amendments to Payroll Tax Exemption for wages paid to trainees

 

I have recently lodged a training contract for an existing worker trainee with the Apprenticeship Office. Will I be able to still claim the Payroll Tax Exemption?

Any existing worker traineeship contract that was lodged prior to 1 December 2017, by your Australian Apprenticeship Support Network Provider (AASN) will continue to be eligible for the Payroll Tax exemption, provided that the trainees total annual salary did not exceed $100,000 at the date of lodgement.

Any traineeship contracts that were lodged after 1 December 2017 will be subject to the announced changes. 

► Please contact Apprenticeship Support Australia on 1300 363 831 to confirm the lodgement date of your training contract.

 

How is the lodgement date determined?

The Apprenticeship Office deems the lodgement date of a contract to be when a fully completed training contract is received by the Apprenticeship Office from your AASN.

Your AASN has to submit a training contract via its electronic system, as well as provide a pdf. version of the contract via email. The electronic lodgement part of this process requires an overnight download, with the Apprenticeship Office receiving the submission the following day.

However, the Apprenticeship Office advised that for training contracts submitted electronically on the 30 November 2017, that they will consider these received prior to 1 December 2017.

► Please contact Apprenticeship Support Australia on 1300 363 831 to confirm the lodgement date of your training contract.

 

How will contract extensions, suspensions and variations affect my Payroll Tax Exemptions for existing worker traineeship contracts?

For employers with existing worker training contracts that were lodged prior to 1 December, the payroll tax exemption is available to the end date (expiry date or completion date) of the training contract as it shows at 1 December 2017, without any extension suspension or variation to the contract.

For example, John’s training contract was lodged with the Apprenticeship Office on 1 October 2017 and registered on 5 October 2017. As of 1 December 2017, John’s training contract has an end date of 31 December 2019 and his employer is able to claim the payroll tax exemption from the commencement date to the 31 December 2019. John’s employer can continue to claim payroll tax exemption on wages paid to John until this date, provided that John’s annual wages did not exceed $100,000 on 1 October 2017.

If John extends his training contract to 31 December 2020, the extended period (01 January 2020 to 31 December 2020) is not eligible for payroll tax exemption.

 

Trainees on wages of $100,000 or more are not eligible for the Payroll Tax Exemption. What is the definition of 'wages'?

According to Office of State Revenue Circular 10, wages are defined in Part 2 of Division 2A of the PTA Act. Wages include gross salaries and wages, allowances, fringe benefits, commissions, bonuses and superannuation contributions.

 

Who determines eligibility for the Payroll Tax Exemption?

The Office of State Revenue will determine if a registered training contract meets their requirement for payroll tax exemption or is subject to the transitional arrangements.

► Any queries relating to the administration of the payroll tax exemption should be made to the Office of State Revenue on 08 9262 1300 or by web enquiry at osr.wa.gov.au/PayrollEnquiry.

 

Coming soon from the Apprenticeship Office

The Apprenticeship Office is in the process of developing assessment guidelines on a worker’s employment status, i.e. existing worker or new entrant and will distribute upon finalisation.

 

Apprenticeship Support Australia continues to seek further advice on how these changes will impact on employers.

►  Check out the Chamber of Commerce and Industry of WA's response to the Payroll Tax Exemption announcement here.

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