|Ruling number||PTA 025|
|Date issued||30 June 2008|
|Issued by||Tony Newbury|
Chief Commissioner of State Revenue
|Effective from||1 July 2007|
Section 13 of the Act defines wages to include allowances paid or payable to an employee. Generally, all allowances are taxable for payroll tax purposes. However, motor vehicle allowances that do not exceed the exempt component are not subject to payroll tax (section 29 of the Act).
According to section 29(4) of the Act, the exempt component is calculated using the formula: business kilometres x exempt rate. The exempt rate is the rate prescribed by the regulations under the Income Tax Assessment Act 1997 (Cth) for calculating a deduction for car expenses for a large car using the cents per kilometre method in the financial year immediately preceding the financial year in which the allowance is paid or payable. If no such rate is prescribed, the exempt rate is the rate prescribed under the Payroll Tax Regulations.
It has been recognised that real estate salespersons travel extensively to carry out their duties and it is difficult for them to maintain records. As a consequence, a real estate sales person may be paid a motor vehicle of a fixed amount (also known as a locomotion allowance).
If an employer in the real estate industry pays motor vehicle allowances on a per kilometre basis, please refer to Revenue Ruling PTA 005. Revenue Ruling PTA 005 provides general guidance on the calculation of the exempt component for motor vehicle allowances and explains the criteria that must be satisfied for the amount to be exempt.
The purpose of this Revenue Ruling is to explain the payroll tax treatment of a motor vehicle allowance paid as a fixed amount to a real estate salesperson (also known as a locomotion allowance).
The Chief Commissioner of State Revenue considers 250 kms per week to be a reasonable amount of business travel by a real estate salesperson. This means that the exempt component for a motor vehicle allowance paid to a real estate salesperson is 250kms x exempt rate.
Employers in the real estate industry who do not have records of business kilometres travelled by their salespersons may use 250 kms to calculate the exempt component provided all the following conditions are satisfied:
If the motor vehicle allowance paid or payable to a real estate salesperson exceeds the exempt component and the above conditions are satisfied, the following will apply:
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.