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Home > Taxes > Pay-roll tax Harmonisation > How harmonisation will affect you > Relevant contract provisions

Relevant contract provisions

From 1 July 2008, if you create or hold a contract that involves:

being supplied with services; or
supplying services; or
giving out goods for their re-supply after work has been performed in relation to the goods,

Then, you will need to include the labour component of the contract as part of your taxable wages.

However, a number of exemptions are available, and if any one of these exemptions apply to a particular contract, then payments made under this contract do not need to be included as part of your taxable wages.

The liability for pay-roll tax rests with the employer who receives the goods or services.

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More information

Under certain circumstances, payments to contractors will be taxable. Generally, those circumstances are where the contractor provides essentially labour services to a small number of principals in a financial year, although payments to contractors may be taxable in other cases. The term "contractors" is generic and includes sub-contractors, consultants and outworkers. The GST component of the contract is not liable.
For further details, see our information sheets and select 1 - Relevant contracts.
For information regarding draft Practice Direction PY 9.1, please click on the following link Practice Direction PY 9.1 - Remission of penalty tax and unpaid tax interest - relevant contracts