Definition of terms—Payroll tax

A

Actual periodic deduction

This deduction is based on the actual amount of wages that an employer pays in a period if they only pay Queensland wages and are not in a group.

Section 17 of the Act deals with how to calculate this deduction.

Actual wages

The amount of wages actually paid in any return period. These are compared to the estimated amounts in other returns, which were calculated in advance.

This is relevant for annual returns and the estimated value of fringe benefits, which are outlined in section 29 of the Act and s.13B of the Payroll Tax Regulation 2009.

Annual deduction

When the amount of taxable wages paid in a year is calculated, a deduction may apply. If your wages are combined with those of other businesses, only the designated group employer can claim this deduction.

See sections 29 and 33 of the Act for more detail.

Annual liability

At the end of the financial year, there may be payroll tax outstanding where the actual wages paid during the year were more than the sum of the amounts recorded in returns submitted throughout the year. This extra amount is the annual liability.

See sections 30 and 34 of the Act for more detail.

Annual return

This return is due on 21 July every year and outlines all the taxable wages paid in that year to compare to the sum of the wages recorded in the returns an employer submitted throughout the year.

See section 63 of the Act for more detail.

B

C

Change of status

A change of status happens the first day an employer:

• ceases to employ
• becomes a group member or the designated group employer
• ceases to be the designated group employer or part of a group
• appoints an administrator, or comes to the end of a period of administration.

 

This definition can be found in section 5 of the Act.

D

Designated group employer

The designated group employer is the business in the group that is able to claim the deduction for the group.

See section 75 and the schedule of the Act for more detail.

E

Employer

An employer is anyone who is supplied with services and must pay wages in return.

See the Schedule of the Act for more details.

Employee

An employee performs work and receives a wage in return for that work.

Persons are also taken to be employees under section 13D (relevant contact employee) and section 13I (workers under employment agency contracts).

Employment agent

An employment agent hires workers to perform services for their client organisations on a temporary basis. This includes labour hire companies and other arrangements where there is no contract of employment between the worker and the client organisation.

See employment agents and section 13G(1) of the Act for more detail.

 

Exemption threshold (or just ‘threshold’)

The threshold is the value that an employer or group of employers' wages must before they need to register with us for payroll tax. The current threshold is $19,230 a week ($1 million in a financial year).

See section 52 of the Act for more detail.

F

FBT taxable amount

Payments which are liable as a fringe benefit for fringe benefits tax are also considered to be taxable wages for payroll tax returns.

The Payroll Tax Regulation 2009 deals almost exclusively with fringe benefits.

Final liability

In a final period, the difference between the amount of payroll tax an employer has to pay in that period and the sum of the amounts they paid in periodic returns during that period, is their final liability.

See sections 37 and 38 of the Act for more detail.

Final period

If a business has a change of status, a return is due for the final period, which starts on the latest of 1 July, when the employer registered or the last time such an event happened. The final period ends the day before the relevant change occurs.

See section 6 of the Act for more detail.

Final return

If a business changes its status, a final return must be submitted—even if it is outside the normal return period—to pay outstanding amounts or get a refund.

See section 64 of the Act for more detail.

Fixed periodic deduction

An employer who is the DGE of a group, or is not in a group but pays interstate wages can calculate a fixed periodic deduction, for specified return periods.

See sections 17, 20 and 21 of the Act for more detail.

Fringe benefit

A non-monetary benefit that an employer gives an employee in return for their services. The value of these benefits needs to be included in an employer’s taxable wages.

See the following for more details:

• section 13 of the Act
• the Schedule to the Act
• Public Ruling PTA003—Fringe benefits 
• Payroll Tax Regulation 2009.

G

Grant

When a person acquires a share or option in a company, the share or option is granted to the person.

Section 13O of the Act and section 139G of the Income Tax Assessment Act 1936 (Cwlth) outlines when a share or option is granted.

Grossed up value

The value of a fringe benefit after the initial value has been multiplied by the type 2 gross up factor specified in the Fringe Benefits Tax Assessment Act 1986 (Cwlth).

Group

The wages of related or connected businesses are combined for payroll tax calculation. These businesses form a group.

See Part 4 of the Act for more detail.

Group member

An employer who is part of a group of related businesses whose wages are combined for payroll tax is a group member.

See Part 4 of the Act for more detail.

 

H

I

J

K

L

M

‘Make up’ pay

If an employee receives a workers’ compensation payment that is less than their normal wages, the amount that an employer pays to make up the difference is called ‘make-up’ pay. This is a taxable amount.

N

Non-grouped employer

A non-grouped employer is an employer whose wages are not combined with those of any other employers for calculating payroll tax.

O

Option

An option is a person’s right, whether actual, prospective or conditional, to acquire a share.

See the Schedule of the Act for more information.

P

Periodic liability

A periodic liability is the amount of payroll tax an employer must pay when they lodge a periodic return (usually every month).

See section 20 of the Act for more detail.

Periodic return

An employer must lodge a periodic return within 7 days after the end of a period—usually a month—for the taxable wages paid in that time.

See section 59 of the Act for more detail.

Periodic return period

The periodic return period starts on the first day of the month and ends on the last day of the month, unless the Commissioner approves a different time frame. The liability for any return period that includes June will be incorporated in the annual return.

See section 60 of the Act for more detail.

Q

R

Rebate

An employer may have a certain part of their payroll tax liability given back to them, if they employ people fulfilling certain conditions or under certain programs.

Relevant contract

A relevant contract occurs when a person (in the course of their own business) supplies services to someone else or receives such services from someone else.

See section 13B(1) for a full definition.

Remuneration

Any payment that is in return for services.

Return period

The time frame covered by any of the returns you must submit with your payroll tax.

See the Schedule to the Act for more information.

S

Services rendered

Work that a person performs for their employer that they have been paid a wage for—or will be paid for—is considered services rendered.

Significant wage change

A significant wage change happens during a month when the amount of annual wages that an employer can estimate at the end of the month differs by more than 30% from the annual wage figure used to calculate the fixed periodic deduction.

See section 19 of the Act for more information.

Superannuation contributions

Any contribution (monetary or otherwise) that an employer or company makes on behalf of their employee or director to a superannuation, provident or retirement fund.

See section 3 of the Act for more information.

T

Taxable wages

Any payments liable for payroll tax made to an employee for their services are called taxable wages.

See the Schedule to the Act for more information.

Threshold

See Exemption threshold

U

V

Vest

A share vests when the conditions accompanying the share are fulfilled and the person who holds it cannot have their interest in it taken away.

See section 13R of the Act for more information.

W

Wages

Among other things, payments from an employer are wages if they are:

• salaries and other payments made in return for services an employee or director provides
• payments to which the recipient has an enforceable right
• termination payments.

 

See the Schedule to the Act for more information.

X

Y

Z