By Gilda Brisotto

If you are an employer (or group of employers) who pays $1,000,000 or more a year in taxable wages, you must pay payroll tax. You may however have to register for payroll tax even if your annual wages are under this amount.

When do I need to register?

You must register for payroll tax within 7 days after the end of the month in which you:

• Pay more than $19,230 a week in Australian Taxable Wages or; • Become a member of a group that pays more than $19,230 a week in Australian Taxable Wages.

You must register for payroll tax if you meet the above criteria even if you think that you will pay less than $1,000,000 in Australian wages in a year.

What are taxable wages?

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

In general, payments are liable for payroll tax if they are: • a reward for services rendered by an employee and/or director (Wages and Allowances) • payments to which the recipient has an enforceable right (e.g. 9% Superannuation Guarantee Payment) and include a cash salary which the employee elects to forgo in return for other benefits (e.g. Salary Sacrificed items such as Superannuation).

Example: The payroll records of XYZ Pty Ltd for November 2011 report

Gross Wages $75,000

Salary Sacrificed Superannuation $15,000

9% SGL Super $ 6,750

Taxable Wages $96,750

Also Employing Staff in Other States

An employer or group of related businesses may be liable for payroll tax if the total taxable wages throughout Australia exceed the payroll tax threshold in that particular State.

eg. The payroll tax threshold in NSW is $678,000. If you pay $150,000 wages in NSW and $700,000 in Queensland, you may still be liable for NSW Payroll Tax (on a pro-rata basis) because your overall Australian Wages of $850,000 exceeds the NSW payroll tax threshold.