Step-by-step guide to payroll tax
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Step-by-step guide to payroll tax

A step-by-step guide to payroll tax including how to pay, lodge returns and record keeping.

Chapters

  1. What is payroll tax?
  2. Do I need to register / pay?
  3. How do I pay?
  4. How do I lodge returns?
  5. What happens if I don’t lodge or pay?
  6. What are liable wages?
  7. What records must I keep?
  8. Common errors
  9. What to be aware of as your business grows
  10. Industry-specific payroll tax
  11. Compliance

5. What happens if I don’t lodge or pay?

Payroll tax audits

We rely on you to voluntarily self-assess and comply with your payroll tax obligations.

We regularly conduct audits to make sure businesses are paying the correct payroll tax. We'll audit you if you fail to register with us for payroll tax, or we think you’ve understated your wages.

Sometimes, errors occur because you don’t fully understand the legislative requirements. We’ll help you bring your tax affairs up-to-date and understand any future payroll tax obligations.

Our audits also help us determine what our customers need to know, and how we can improve policies and legislation.

Penalties

Penalties will generally apply if the tax is underpaid or not paid when due. The penalty depends on the level of fault and is outlined in the Taxation Administration Act 1996.

When you’ve taken reasonable care to comply or where circumstances occurred beyond your control, no penalty will apply. However, when you’ve intentionally disregarded the law, penalties up to 75 per cent of the unpaid tax will apply.

Voluntary disclosure before or during the audit can give you a reduced penalty. On the other hand, hindering or obstructing the auditor, or concealing information, will result in increased penalties.

Interest

Interest may be charged for a tax default, depending on the circumstances. Read more on out interest and penalty tax page.