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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.
Taxable if you pay:
Long service leave
Not taxable for wages paid to a maximum of 14 weeks, or the equivalent amount if taken over a longer period
Not taxable if the employee is:
Not taxable if it is a:
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
Taxable in accordance with the Fringe Benefits Tax Assessment Act 1986 (Cwlth)
Taxable over the exempt component when you calculate the number of kilometres an employee travels for business purposes in their own car
Car parking fringe benefits
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.
Not taxable as of 1 July 2011
Taxable, unless it is a:
Valued using the Type 2 gross-up factor
Taxable unless not related to employment services
Low-interest or interest-free loans
Taxable if they form or are defined as wages
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
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