Glossary of payroll tax terms

Get to know the terms below to help your understanding of payroll tax.

Actual periodic deduction - a deduction based on the actual amount of wages that you pay in a period if you only pay Queensland wages and are not a member of a group.

Annual deduction - a deduction that may apply when the amount of taxable wages paid in a year is calculated. If your wages are combined with those of other businesses, only the designated group employer (DGE) can claim this deduction. If the deduction is larger than the DGE's Queensland taxable wages, the excess will be allocated to the group members.

Annual liability - any liability calculated on the annual return, which is greater than the amount of primary tax calculated on the periodic returns lodged within the annual return period.

Annual return - the return due on 21 July every year that details all the taxable wages paid in that year, to reconcile the sum of the wages recorded in the periodic returns an employer submitted throughout the year.

Change of status - occurs when a certain event requires you to lodge a final return to change your employer status, such as the first day you, as an employer:

  • cease to employ anywhere in Australia
  • become a group member or the designated group employer
  • cease to be the designated group employer or part of a group
  • appoint an administrator (receiver and manager or liquidator), or come to the end of a period of administration.

Deemed employee - persons (including incorporated entities, trusts, partnerships and natural persons) who are taken to be employees under s. 13D (relevant contract employees) and s. 13I (service providers under employment agency contracts) of the Payroll Tax Act 1971.

Deemed employer - any person taken to be an employer under s. 13C (relevant contract) and s. 13H (employment agency contract) of the Payroll Tax Act.

Designated group employer (DGE) - the business in a group that is able to claim the deduction for the group. The DGE is either nominated by the members of the group or the Commissioner of State Revenue.

Employee - someone who performs work and receives a wage in return for that work. (Special definitions apply for the employment growth rebate.) See also deemed employee.

Employer - any person who pays or is liable to pay any wages. The State of Queensland is considered an employer. See also deemed employer.

Employment agent - a business that hires workers to perform services for its clients on a temporary basis. This includes labour hire companies and other arrangements where there is no contract of employment between the worker and the business's client. This is different from a recruitment agency.

Excess deduction - the difference between the DGE's wages and annual deduction, when the deduction is higher than the wages. Other members of the group can use this deduction.

Final liability - any liability calculated on the final return, which is greater than the amount of primary tax calculated on the periodic returns lodged within the final return period.

Final period - if your business has changed its status, this is the period that a return is due for, which starts on the latest of:

  • 1 July
  • when the employer registered
  • the last time such an event happened.

The final period ends the day before the relevant change occurs.

Final return - the return that you must submit if your business changes its status, even if it is outside the normal return period, to pay outstanding amounts or get a refund. This is due within 21 days of the change of status occurring.

Fixed periodic deduction - a deduction you can calculate for specified return periods if you are the DGE of a group, or if you are not in a group but pay interstate wages.

Fringe benefit - a non-monetary benefit that you give an employee in return for their services. The grossed-up Type 2 value of these benefits needs to be included in your taxable wages.

Grant day (for shares) - the day a person acquires a share. For options, it is the day the person acquires a right to the share.

Grossed-up value - the value of a fringe benefit after the initial value has been multiplied by the Type 2 gross-up factor specified in the Fringe Benefits Tax Assessment Act 1986 (Cwlth).

Group member - a person (including incorporated entities, all bodies and associations, trusts, partnerships and natural persons) who is a member of a group.

Interstate wages - wages that are taxable in other Australian states or territories under laws that correspond with the Queensland Payroll Tax Act.

Make up pay - the amount you pay to make up the difference between an employee's workers' compensation payment and their normal wages. This is a taxable amount.

Non-grouped employer - an employer who is not a member of a payroll tax group.

Option - a person's right (whether actual, prospective or conditional) to acquire a share or have a share transferred or allotted to them.

Periodic liability - the amount of payroll tax you must pay when you lodge a periodic return (usually every month).

Periodic return - the return that is due within 7 days after the end of a period (usually a month) for the taxable wages paid in that time.

Periodic return period - starts on the first day of the month and ends on the last day of the month, unless the Commissioner of State Revenue approves a different time frame. The liability for any return period that includes June is incorporated in the annual return.

Principal place of residence - a residence that an employee lives in (with their personal belongings) on a daily and ongoing basis. Other deciding factors include:

  • where the employee's immediate family lives
  • how long the employee has lived in the residence
  • the address the employee has their mailed delivered to
  • the address recorded on the employee's driver licence or passport
  • whether utilities (e.g. electricity, gas and phone) are connected to the dwelling and the accounts are in the employee's name.

Transient and temporary accommodation does not qualify as a principal place of residence.

Regional employee - an employee whose principal place of residence is in regional Queensland.

Regional employer - an employer whose registered business address (or if they have no ABN, their principal place of business) is in regional Queensland and at least 85% of their taxable wages are paid to regional employees.

Regional Queensland - the following areas:

  • Cairns
  • Central Queensland
  • Darling Downs Maranoa
  • Mackay - Isaac - Whitsunday
  • Queensland - Outback
  • Townsville
  • Wide Bay.

Relevant contract - a contract where a person in the course of their business does any of the following:

  • supplies services to another person for or in relation to the performance of work
  • receives services from another person for or in relation to the performance of work
  • gives out goods to natural persons for work to be performed by those persons in respect of those goods and for re-supply of the goods to the first-mentioned person, or, where that person is a member of a group, to another member of that group.

Remuneration - any payment that is in return for services.

Return period - the time frame covered by any of the returns you must submit with your payroll tax.

Self assessor - a taxpayer or tax agent required or permitted under a revenue law to lodge a return or transaction statement.

Services rendered - work that a person performs for you, for which they have been or will be paid a wage.

Significant wage change - when the amount of annual wages that you estimate at the end of the month differs by more than 30% from the estimated annual wage figure used to calculate the fixed periodic deduction. If you are a designated group employer, the estimated annual wages should include all of your group members' wages.

Superannuation contributions - any contribution (monetary or otherwise) that you make on behalf of your employee or director to a superannuation, provident or retirement fund.

Taxable wages - any wages that are liable for payroll tax in Queensland.

UTI - unpaid tax interest. It accrues when tax is not paid by the due date.

Vest (for shares) - when the conditions accompanying the share are fulfilled and the person who holds it cannot have their interest in it taken away.

Vesting day (for shares) - the first day when:

  • any conditions applying to the grant have been met
  • and

  • the grantee's legal or beneficial interest in the share cannot be rescinded
  • or

  • (from 1 July 2011) the earlier of either the day as defined above or the day that is 7 years after the grant day of the share to the grantee.

Vesting day (for options) - the earlier of:

  • the day the shares that are subject to the option are granted
  • the day the employee exercises the option
  • (from 1 July 2011) the day that is 7 years after the option is granted to the grantee.

Wages - broadly refers to salaries and other payments made in return for services an employee or director provides, to which the recipient has an enforceable right. Learn about when wages are taxable.