Employment agents and payroll tax

If you are an employment agent, you may be liable for payroll tax on the wages you pay workers for services provided to your clients.

You may be liable for payroll tax if you obtain and pay an individual worker to supply services to a client and:

  • the worker does not become an employee of the client
  • remuneration is paid or payable by you for the worker's services
  • you are entitled to receive payment from the client for the period for which the worker supplies services to that client.

Before 1 July 2008, for the arrangement to be regarded as an employment agency contract, your worker was also required to perform employee-like functions. From 1 July 2008, this is no longer required.

This guide explains how payroll tax applies to an employment agent or labour hire arrangement, including where government is the client and when the client is exempt.