Checklist of liable and exempt items
A quick guide to assist you to understand liable and exempt wages.
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A
Wage type Liability status Comments Accommodation allowances Exempt component applies
Adoption leave
Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay
Paid in addition to normal leave
Aged Care Retention Grant
Exempt
Wages paid from 1 June 2020 that are funded by any payment made under the Commonwealth program, Aged Care Workforce Retention Grant Opportunity Aged Care Workforce Bonus payment Exempt Wages paid from 1 February 2022 that are funded by any payment made under the Commonwealth program, Aged Care Workforce Bonus Grant Opportunity Allowances
Liable
All types liable except for exempt component for motor vehicles and accommodation
Apprentice wages
Liable
Rebate scheme applies
D E
Wage type Liability status Comments Defence Force payments Exempt For time taken as military leave Directors fees Liable Dividends Not liable Return on investment is not liable Early retirement scheme benefits Liable (income taxable component only) Employment termination payment Liable (income taxable component only) Statutory redundancy components not liable Emergency operations Exempt For wages paid to a volunteer member involved in emergency operations Employment agency paymentsLiable Employment agency itself is liable for on-hire contracts unless end user is exempt
H I J
Wage type Liability status Comments Holiday pay Liable Indigenous employees (payments made to) Exempt under certain conditions Wages exempt if an approved project JobKeeper Payments Exempt under certain conditions Additional wages paid by employers to an employee to meet the requirements of the JobKeeper Paymen t scheme are exempt. JobMaker Hiring payments
Exempt Payments made under the Federal Government's JobMaker Hiring Credit Scheme that helps business meet the cost of hiring additional employees. The payments are not subject to payroll tax because they are not wages paid to employees. Further information available on ATO website .
Jury duty (employer payments) Liable Payments made by an employer to an employee are liable wages Jury duty (court payments) Not liable Payments made by the court system to an employee are not liable wages
N O P
Wage type Liability status Comments Overtime Liable Paid parental leave (PPL) paid by the Commonwealth Government Not liable Partnership drawings Not liable Paternity leave Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay Paid in addition to normal leave Payments in lieu of notice Liable Employment termination payment Piece work payments Liable For payments by quantity of output Portable long service leave fund payments Not liable Prizes Liable As per Fringe Benefits Tax Assessment Act 1986
Q R
Wage type Liability status Comments Quarters/housing Liable As per Fringe Benefits Tax Assessment Act 1986 Redundancy payments Liable (income taxable component only) Statutory redundancy component not liable Reimbursements Not liable Must be a business expense which is accounted for Retirement payout Liable All unused leave is liable
T U
Wage type Liability status Comments Termination payments Liable (income taxable portion only) Statutory redundancy components not liable Tool allowances Liable Trainee wages Liable Rebate scheme applies Travel allowances Liable Trust distributions Not liable Uniform allowance Liable Unused leave Liable Termination payments
V W X Y Z
Wage type Liability status Comments Volunteer firefighters Exempt For wages paid while involved in firefighting activities Vouchers Liable As per Fringe Benefits Tax Assessment Act 1986 Workers compensation Not liable Only statutory compulsory amounts are not liable