The Queensland Government is now in caretaker mode until after the state election. Minimal updates will be made to this site until after the election results are declared.

Payroll tax deductions on contractor payments

If you are required to pay payroll tax on contractor payments where the contractor provided materials and equipment, you may deduct an approved non-labour component from your taxable wages.

You must declare the entire payment (both labour and non-labour components) less any approved deduction as wages.

Use the approved percentages in the table below to work out the non-labour component deduction.

If a profession or trade is not listed, contact the Office of State Revenue in writing for advice at:

You should also deduct GST before calculating payroll tax.

Type of contractor Deduction from gross payment
Architects 5%
Blind fitters 25%
Bricklayers 30%
Building supervisors (who provide their own vehicles and inspect more than 6 sites per week) 25%
Cabinet makers, kitchen fitters 30%
Carpenters 25%
Carpet layers 25%
Computer programmers 5%
Draftspersons 5%
Electricians 25%
Engineers 5%
Fencing contractors 25%
Painters (who provide their own paint) 30%
Painters (who do not provide their own paint) 15%
Plumbers 25%
Resilient floor layers, vinyl layers 37%
Roof tilers 25%
Tree fellers 25%
Wall and ceiling plasterers 20%
Wall and floor tilers 25%

For more information, see the following public rulings:

Also consider...