Revenue Ruling No. PTA 018

Contractor Deductions

(Payroll Tax Act 2007)

Ruling history

Ruling no.Issued dateDates of effectStatus
PTA 018 11 January 2008 1 July 2007 - Current


The Payroll Tax Act 2007 (the Act), which commenced on 1 July 2007, rewrites the Pay-roll Tax Act 1971 and harmonises the payroll tax legislation in Victoria and NSW.

Parties to a ‘relevant contract’ are deemed to be employers and employees (sections 33 and 34 of the Act) and payments made under a contract are deemed to be wages (section 35 of the Act). Deemed wages are subject to payroll tax under section 36 of the Act.

While most contracts for the provision of services come within the meaning of ‘relevant contract’ under section 32 of the Act, certain types of contracts are specifically excluded from the definition of ‘relevant contract’. Where none of the exclusions apply, section 35(2) of the Act allows the Chief Commissioner of State Revenue (the Chief Commissioner) to determine an amount which can be deducted from the payments made under the contract.

The purpose of this Revenue Ruling is to set out those deductions for materials and equipment for certain types of contractors and to outline the manner in which new deductions may be granted.


Deductions below are for the non-labour components where the contractor provides equipment and/or materials. Based on submissions made by employers and industry representatives, the Chief Commissioner has allowed the following percentage deductions:

Type of contractor Deduction from gross payments to contractor
Architects 5%
Blind Fitters 25%
Bricklayers 30%
Building Supervisors (who provide their own vehicles and inspect more than six sites per week) 25%
Cabinet Makers/Kitchen Fitters 30%
Carpenters 25%
Carpet layers 25%
Computer programmers 5%
Draftspersons 5%
Electricians 25%
Engineers 5%
Fencing contractors 25%
Painters (who provide their own paint) 30%
Painters (who do not provide their own paint) 15%
Plumbers 25%
Resilient floor layers/vinyl layers 37%
Roof tilers 25%
Tree fellers 25%
Wall and ceiling plasterers 20%
Wall and FloorTilers 25%

If a profession/trade is not listed above, a principal may apply to the Chief Commissioner for a determination with details regarding the cost of materials and equipment provided by the contractor.

This Revenue Ruling is effective from 1 July 2007.

Please note that rulings do not have the force of law. Each decision made by the Office of State Revenue is made on the merits of each individual case having regard to any relevant ruling.

Bob Smith
Chief Commissioner of State Revenue
11 January 2008

Last updated: 16 April 2015