Wages paid to apprentices and trainees are generally exempt from payroll tax. This rebate will reduce the tax payable on other employees' wages.
OSRconnect will automatically calculate the rebate amount. Employers of apprentices and trainees who do not lodge through OSRconnect will need to manually calculate and deduct the rebate before lodging their periodic returns.
To work out the rebate manually, you will need to multiply 25% of the total wages paid to these employees by 4.75% (payroll tax rate) for each return period.
Example
An employer pays $50,000 in exempt apprentice/trainee wages for a periodic return.
| Initial payroll tax periodic liability (on all taxable wages) | $10,000.00 |
| Less incentive rebate ($50,000 x 25%) x 4.75% | $ 593.75 |
| Payroll tax periodic liability | $ 9,406.25 |
The rebate reduces the employer's periodic liability by $593.75.
If the rebate is more than the payroll tax periodic liability, you cannot claim the difference—it will be limited to the amount of the periodic liability.
You must keep all rebate records for 5 years.