Record keeping for contractor exemptions
If you claim one of the 9 exemptions on the payments you make to your contractors, you should keep accurate records.
These records should be easy to access and read – so that you can hand them over to us, if requested, for an audit. You must keep records for 5 years unless we advise otherwise.
If your business is selected for a payroll tax review or investigation, you will need to supply evidence to support exemptions you have claimed. It is your responsibility to substantiate an exemption claimed – it is not up to the Commissioner to disprove a claim. Examples of records you should keep include:
- the contract or sub-contractor agreement
- scope of works documentation (e.g. work or purchase order)
- tax invoices from the contractor, including a breakdown of the cost of labour and equipment
- accounting records of payments made to a contractor
- general ledger summaries
- contractor payment summary
- taxable payments annual reports (TPAR) lodged with the Australian Taxation Office (ATO)
- price lists from suppliers
- details of the contractors you engage, including their ABN, contact details, business website address and any other published advertising material
- relevant declarations from contractors and/or their employees that verify the accuracy of the exemption you have claimed
- attendance records for the days on which contractors attended your business premises or work site
- WorkCover Queensland policy records (or interjurisdictional equivalent).