Compliance

Working with you

You play an important role in meeting your own payroll tax obligations. Our job is to make it easy for you to understand your obligations and comply with them.

We will:

• be fair
• be easy to deal with
• know what we are talking about
• be accountable
• treat you with respect, and ask the same in return.

You should:

• know and fulfil your responsibilities
• be open and give timely, accurate and complete information so we can resolve things faster
• keep records that support your situation and tell us when things change
• let us know about any problems sooner rather than later so we can help.

Payroll tax audits

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

We regularly conduct audits to make sure you’re paying the correct payroll tax. We'll audit you if you fail to register with us for payroll tax or have understated your wages.

Sometimes errors occur because you do not fully understand 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 identify customer education needs or issues that need improvements in policy and legislation.

Case selection

We select audits from research, data mining and data matching programs. Some cases are selected randomly from a particular industry or customer group.

If you are selected for an audit

If you’re selected for an audit, we will:

• phone to let you know it’s going to happen
• explain the process and scope
• tell you the records you must produce
• allow you reasonable time to prepare those records
• arrange a convenient time and place to interview you, or your representative
• confirm these arrangements in writing.

Our auditor will conduct interviews and make enquiries to establish if you’re complying with the legislation.

We will examine and test some of your business and financial records. After the audit, we’ll let you know the outcome and any proposed action.

Our officers are bound by legislative secrecy provisions. Information gathered during an audit is treated with the strictest confidence and will not be used or divulged, except for purposes required by law.

Powers of auditors

The Taxation Administration Act 1996 and other legislation allows our auditors to:

• gain access to buildings and property
• inspect, examine, copy and seize books, documents or records
• require you to answer questions and provide information
• require you to give reasonable assistance.

If you fail to comply with an auditor’s legal requests, it can result in greater penalties or prosecution.

Preparing for an audit

Make sure that all records the auditor requests are ready for examination.

If you find any discrepancies or undeclared tax liabilities, and voluntarily tell the auditor about them before the interview, penalties may be reduced.

For complex matters, ask your agent (legal or financial representative) for advice. We encourage you to do this if it helps you understand the issues involved.

If you have any questions about the audit or the processes involved, ask the auditor for assistance.

Records required

You may be asked to provide the following:

• balance sheets (with notes)
• trading and detailed profit and loss statements
• superannuation reports for employees and directors
• end of year employee and management payroll summary reports, including year-to-date for the current financial year
• fringe benefit tax (FBT) returns
• general ledger accounts detailing payments made to contractors or subcontractors engaged by the business
• confirmation letter from the NSW Department of Industry with the approval of any apprenticeships or traineeships for employees you wish to claim a payroll tax rebate
• details and supporting documentation for any share and option schemes in place for directors and/or employees. This includes any schemes operated by parent and/or overseas companies
• details of shareholders, directors and beneficiaries of the business and their interest in other businesses or entities, if applicable.

If you’re a member of a group for payroll tax, you must have copies of the above records for all group members.

Before an audit, you can:

• ask for reasonable time to produce your records
• negotiate the time and place for the initial interview with the auditor
• get written confirmation of the arrangements.

During an audit, you can:

• expect the auditor to be professional and courteous
• see the auditor’s identification authority
• involve your accountant, legal or other representative in the process
• ask how long the audit will take
• expect strict confidentiality
• obtain a receipt for records or other material the auditor removes from your office
• be given the opportunity to explain the reasons for any irregularities and discrepancies.

During an audit, you must:

• give the auditor reasonable assistance and facilities
• give complete and honest answers and explanations to questions
• provide prompt, full and free access to all relevant information, records, documents, data and systems as required.

After an audit, you can:

• expect to receive an explanation of the results or findings
• ask the auditor how penalty provisions are to be applied
• ask for advice about the objection and appeal process
• discuss any aspect of the case with the auditor or case manager
• have the opportunity to provide feedback by completing a customer survey.

Estimated timeframe

The length of an audit often depends on the information you provide, how quickly you provide it, its accuracy and completeness.

Record keeping

You must:

• keep relevant records for at least five years following the completion of any transaction
• ensure records enable a payroll tax liability to be properly assessed
• keep records in English or in a form easily translated to English.

Penalties

Penalties will generally apply if the tax is underpaid. The penalty depends on the level of fault and is outlined in the Taxation Administration Act 1996.

Penalties can range from nothing, where you’ve taken reasonable care to comply or where circumstances occurred beyond your control, through to 75 per cent of the unpaid tax when you’ve intentionally disregarded the law.

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.

If you have any questions about how penalties are applied, ask the auditor for assistance.

Payment

Payment is due 21 days after the issue date of an assessment notice. Failure to pay, or make alternative arrangements by the due date will result in interest charges and the matter being referred for debt recovery.

The auditor will negotiate an appropriate payment arrangement if you’re unable to pay the amount in full by the due date. A written application accompanied by financial information, including detailed cash flow projections, is required for an extension to your payment arrangements.

Interest is generally charged on amounts payable between the time the debt should have first been paid and when it’s paid in full.

Pay your payroll tax now

Objections and appeals

If you’re not satisfied with any assessment of liability or decision, you can lodge a formal objection in writing. You have 60 days from the date of the assessment, or the decision, to lodge an objection. Your objection will be considered by independent staff who work in a separate review unit.

If you remain dissatisfied after the determination of your objection, you can ask for further review either through the NSW Civil and Administrative Tribunal (NCAT) or the NSW Supreme Court within the required timeframe.

For more information, read the objections and reviews page.

Comments on conduct of an audit

When an audit is finished, we conduct a customer survey to make sure our level of professionalism and customer service is maintained.

Employer questionnaire

If you’re not registered for payroll tax and receive a notice of investigation from us, you must use our online service to access and complete the employer questionnaire. When you finish, upload the questionnaire together with your records.

Information required

Customer information

You must provide the following:

• your client ID and correspondence ID from your payroll tax notice of investigation
• your ABN or ARBN
• business address details
• contact name and daytime telephone number.

Business records

You must provide the following:

• employee and management payroll reports
• year-end superannuation reports for employees and directors
• balance sheets (with notes)
• trading and detailed profit and loss statements (if these are not finalised for any period, a draft copy will be accepted)
• fringe benefit tax (FBT) returns
• general ledger account reports, detailing payments made to contractors or subcontractors engaged by the business (sort the report for each year by subcontractor name)
• confirmation letter from the NSW Department of Industry regarding the approval of any apprentices or trainees you wish to claim a payroll rebate on
• details of shareholders, directors and beneficiaries, and their interest in other businesses or entities.

If your business is a member of a group, you must provide copies of the above records for all group members.

Instructions

Download a copy of the employer questionnaire and save it to your computer by entering your client ID and correspondence ID in the login box.

Log in using your client ID and correspondence ID and upload the questionnaire together with the required business records. If your business is a member of a group, you must upload copies of records for all group members.

Estimated time

It should take about thirty minutes to complete and submit this form.

Privacy statement

We need this information to help us determine if you have a liability or entitlement. The information may be provided to third parties with your consent or as required or permitted by law. We will correct or update your personal information at your request. For more information, read the privacy page.

Complete your employer questionnaire now

Contact us

If you have a question about our compliance activities and cannot find the answer on this website, contact us.