Payroll tax on leave, allowances and benefits
JobKeeper payments are exempt from payroll tax.
Payroll tax can apply to payments made to employees in the form of leave, allowances and benefits.
The tables below list typical payments and if they are taxable.
Leave
Type | Liability |
---|---|
Taxable if you pay:
| |
Not taxable | |
Holiday pay | Taxable |
Jury service | Taxable |
Leave loading | Taxable |
Long service leave | Taxable |
Taxable | |
Not taxable | |
Not taxable for wages paid to a maximum of 14 weeks, or the equivalent amount if taken over a longer period | |
Sick leave | Taxable |
Not taxable if the employee is:
| |
Not taxable if it is a:
|
Allowances
Type | Liability |
---|---|
Taxable for the part of the allowance over the exempt rate as long as it is used for overnight accommodation - this can also include meals and incidentals | |
Clothing | Taxable |
Taxable in accordance with the Fringe Benefits Tax Assessment Act 1986 (Cwlth) | |
Meal | Taxable |
Taxable over the exempt component when you calculate the number of kilometres an employee travels for business purposes in their own car | |
Overtime | Taxable |
Relocation | Taxable |
Tool | Taxable |
Benefits
Type | Liability |
---|---|
Car parking fringe benefits | Not taxable |
Cars | Taxable |
Taxable If in exchange for fringe benefits, the fringe benefits' grossed-up value is taxable. Otherwise, the entire sacrificed amount is taxable | |
Entertainment fringe benefits | Taxable, if providing entertainment amounts to a fringe benefit (e.g. the cost of theatre tickets purchased by an employee and reimbursed by the employer) Tax-exempt body entertainment fringe benefits may be subject to fringe benefits tax but are specifically exempt for payroll tax purposes, so are not taxable. |
Exempt benefits | Not taxable as of 1 July 2011 |
Taxable, unless it is a:
Valued using the Type 2 gross-up factor | |
Gifts | Taxable unless not related to employment services |
Low-interest or interest-free loans | Taxable |
Taxable if they form or are defined as wages | |
Reimbursements | Not taxable unless a fringe benefit An expense payment fringe benefit may arise where an employer:
These expenses may be business or private expenses, or both |
- Last reviewed: 31 Jan 2022
- Last updated: 2 Dec 2021
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