Taxes, duties, levies and royalties

A-Z list of liable, exempt and non-liable payments

Use this alphabetical list of wages and payments as a quick guide for what to include in your payroll tax returns for New South Wales.

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A

Table 1: The liability status of wages and payments beginning with A.

Wage / Payment	Liability status	Comments
Accommodation allowances	Exempt component	Read accommodation allowances for more details. Revenue Ruling PTA 005 v3 – Exempt allowances: motor vehicle and accommodation clarifies the treatment of overnight accommodation allowances.
Adoption leave	Exempt	Exempt for up to 14 weeks full-time or the equivalent period if paid at a reduced rate of pay. Revenue Ruling PTA 012B – Exemption for maternity and adoption leave pay explains the application of the exemption for maternity, paternity and adoption leave pay and clarifies the elements of the exemption.
After tax deductions	Not liable	Includes but is not limited to: child support loan repayments novated lease repayments, and staff deduction super contribution.
Aged Care Workforce Payment (Commonwealth)	Exempt	Wages paid from 1 June 2020 that are funded by any payment made under the Commonwealth Aged Care Workforce Retention Grant Opportunity program.
Aged Care Workforce Bonus Payment (Commonwealth)	Exempt	Wages paid from 1 February 2022 that are funded by any payment made under the Commonwealth Aged Care Workforce Bonus Grant Opportunity program.
Allowances	Liable	Read allowances and payroll tax for more details. Accommodation and motor vehicle allowances have an exempt component. Revenue Ruling PTA 011 – Allowances and reimbursements explains the payroll tax treatment of allowances and reimbursements paid to an employee and any person taken to be an employee.
Annual leave (including paid out and leave loading)	Liable	Component of wages payable to an employee.
Apprentice wages	Liable	A rebate is available. Read apprentice and trainee wages for more details.
Apprentice wages paid by not-for-profit Group Training Organisations	Exempt	Read apprentice and trainee wages and employers exempt from payroll tax for more details.
Australian Construction Industry Redundancy Trust (ACIRT)	Exempt	Employer contributions to ACIRT do not attract payroll tax. Revenue Ruling PTA 034 – Contributions to the construction industry long service leave and redundancy funds clarifies whether payroll tax is payable on contributions made to these funds.

B C

Table 2: The liability status of wages and payments beginning with B and C.

Wage / Payment	Liability status	Comments
Back pay	Liable	No comments.
Before tax salary sacrifice	Liable	If the salary sacrifice is in exchange for fringe benefits, the grossed-up value is taxable (unless exempt). If not, the entire sacrificed amount is taxable.
Bonuses	Liable	Paid or payable to employees and contractors. Read bonuses and commissions for more details.
Car allowance	May be liable	Motor vehicle allowances have an exempt component.
Casual pay	Liable	No comments.
Commissions	Liable	Read bonuses and commissions for more details.
Community service leave	Liable	For activities such as voluntary emergency management activities or jury duty.
Contractor payments	Liable	Liable unless a contractor exemption applies. Read contractors and the contractor exemptions guide for more details. Commissioner's Practice Note 007 – Payroll tax contractors helps businesses decide whether payments they make to independent contractors are liable for, or exempt from, payroll tax.
Contracts for service (independent contractor)	Liable payments	See contractor payments.
Contracts of service (employee)	Liable	Revenue Ruling PTA 038 – Determining whether a worker is an employee provides information about employment relationships to help businesses determine whether their workers are common law employees.
Construction Employees Redundancy Trust	Not liable	Provided contributions do not constitute a fringe benefit. Read fringe benefits for more details.
Consultant payments	Liable	Liable unless a contractor exemption applies. Read contractors and the contractor exemptions guide for more details.

D E

Table 3: The liability status of wages and payments beginning with D and E.

Wage / Payment	Liability status	Comments
Defence Force payments	Exempt	Read exempt wages and payments not liable for payroll tax for more details.
Director's fees	Liable	Read director's fees for more details.
Dividend equivalents	Liable	Read shares and options for more details.
Dividends	Not liable	No comments.
Early retirement scheme	Liable	Only the income taxable component is liable. Read termination payments for more details.
Emergency services volunteers	Exempt	This exemption does not apply to wages that are paid as annual leave, long service leave or sick leave. Read exempt wages and payments not liable for payroll tax for more details.
Employees working overseas	May be liable	Revenue Ruling PTA 039 – Payroll tax nexus provisions clarifies the liability for wages paid for services performed outside all Australian jurisdictions.
Employment agency contracts	Liable	A business that is engaged to procure workers for its clients is liable for payroll tax unless the client is exempt from payroll tax. Read employment agencies and employers exempt from payroll tax for more details.
Employment termination payment	Liable and not liable	Only the income taxable component is liable (Lump Sum A, B and E). The statutory redundancy component is not liable (Lump Sum D). Read termination payments for more details.

F G

Table 4: The liability status of wages and payments beginning with F and G.

Wage / Payment	Liability status	Comments
Fringe benefits	Liable	Read fringe benefits for more details.
Gardening leave	Liable	A term for upper-level executives who are still remunerated but not required to attend the office for the remainder of their contract period.
Gifts related to service	Liable	Read fringe benefits for more details.
Golden handshakes	Liable	Read termination payments for more details.
Gross wage	Liable	No comments.

H I J

Table 5: The liability status of wages and payments beginning with H, I and J.

Wage / Payment	Liability status	Comments
Holiday pay	Liable	No comments.
Income protection insurance paid by employer	Not liable	Insurance benefits that are paid by the insurer through the employer's payroll and not related to services performed.
Income protection insurance premium paid by employer	Liable	Read fringe benefits for more details.
Indigenous employees	May be liable	Wages exempt if employee is working for an approved Community Development Employment project. Read exempt wages and payments not liable for payroll tax for more details.
Industry allowances	Liable	Read allowances and payroll tax for more details. Revenue Ruling PTA 011 – Allowances and reimbursements explains the payroll tax treatment of allowances and reimbursements paid to an employee and any person taken to be an employee.
Interstate wages	Liable	Used to calculate the NSW tax-free threshold. Read interstate wages for more details on how to correctly calculate your tax-free threshold.
JobKeeper payments	Exempt component	Top-up wages paid by employers to an employee to meet the requirements of the Jobkeeper Payment scheme are exempt. Read JobKeeper payments for more details.
JobMaker Hiring payments	Exempt	Payments made under the Federal Government’s JobMaker Hiring Credit Scheme are not subject to payroll tax because they are not wages paid to employees. Visit the Australian Taxation Office website for more details.
Jury duty (court payments)	Not liable	Payments made by the court system to an employee are not liable wages.
Jury duty (employer payments)	Liable	Payments made by an employer to an employee are liable wages.

K L M

Table 6: The liability status of wages and payments beginning with K, L and M.

Wage / Payment	Liability status	Comments
Leave / Leave loading	Liable	Component of wages payable to an employee.
Leave paid out	Liable	All unused leave paid out. Read termination payments for more details.
Living away from home allowance (LAFHA)	Liable	See Fringe Benefits Tax Assessment Act 1986. Revenue Ruling PTA 005 v3 – Exempt allowances: motor vehicle and accommodation clarifies that a LAFHA is a fringe benefit.
Living organ donors	Exempt	Exempt to the extent that they are reimbursed by the Commonwealth under the Supporting Leave for Living Organ Donors Program.
Loan account offsets	May be liable	Revenue Ruling PTA 016 – Profit distributions and loan accounts clarifies whether payments and loans made to a proprietor of a business, who is also an employee of that business, are subject to payroll tax.
Loans	Liable	Liable if there is a fringe benefits tax value. See Fringe Benefits Tax Assessment Act 1986.
Long service leave	Liable	No comments.
Make-up pay	Liable	Payments additional to workers compensation amounts. Only the statutory compulsory amounts are not liable. Read workers compensation for more details.
Maternity leave	Exempt	Exempt up to 14 weeks full-time or the equivalent period if paid at a reduced rate of pay. Revenue Ruling PTA 012B – Exemption for maternity and adoption leave pay explains the application of the exemption for maternity, paternity and adoption leave pay and clarifies the elements of the exemption.
Meal money	Liable	Declared as an allowance.
MERT (the Mechanical and Electrical Redundancy Trust) Payments	Not liable	Not liable if payment does not constitute a fringe benefit.
Military leave	Exempt	Wages paid to a person while on military leave as a member of the Defence Forces.
Motor vehicle allowances (MVAs) paid as a flat or fixed amount	May be liable	Applies to business use of private vehicles. MVAs have an exempt component. Read motor vehicle allowances for more details.
Motor vehicle alllowances (MVAs) paid on per kilometre (km) basis	Exempt	Exempt if business km travelled are substantiated. Applies to business use of private vehicles. MVAs paid on a per km basis are regarded as a car expense payment and are exempt under fringe benefits tax. Read motor vehicle allowances and fringe benefits for more details.
Motor vehicles	Liable	Liable if there is a fringe benefits tax value. Read fringe benefits for more details.

N O P

Table 7: The liability status of wages and payments beginning with N, O and P.

Wage / Payment	Liability status	Comments
Overtime	Liable	No comments.
Paid Parental leave (PPL) paid by the Commonwealth Government	Not liable	Revenue Ruling PTA 037 – Paid parental leave clarifies how PPL payments are treated for payroll tax purposes.
Partnership drawings	Not liable	No comments.
Partnership wages	Liable	Wages paid to employees of a partnership are liable if they exceed the annual tax-free threshold. A partner cannot be an employee of a partnership.
Paternity leave	Exempt	Exempt up to 14 weeks full-time or the equivalent period if paid at a reduced rate of pay. Revenue Ruling PTA 012B – Exemption for maternity and adoption leave pay explains the application of the exemption for maternity, paternity and adoption leave pay and clarifies the elements of the exemption.
Payment in lieu of notice	Liable	Read termination payments for more details. Revenue Ruling PTA 004 – Termination payments clarifies which termination payments are subject to payroll tax.
Payments under a deemed employee-employer relationship	Liable	Revenue Ruling PTA 038 – Determining whether a worker is an employee helps businesses determine whether their workers are common law employees.
Phone allowance	Liable	Read allowances and payroll tax for more details. Revenue Ruling PTA 011 – Allowances and reimbursements explains the payroll tax treatment of allowances and reimbursements paid to an employee and any person taken to be an employee.
Piece work payment	Liable	No comments.
Portable long service leave fund payments	Not liable	Revenue Ruling PTA 034 – Contributions to the construction industry long service leave and redundancy funds clarifies whether payroll tax is payable on contributions made to these funds.
Prizes	Liable	Read fringe benefits for more details.
Profit distribution	Not liable	Revenue Ruling PTA 016 – Profit distributions and loan accounts clarifies the payroll tax treatment of these payments.
Public holiday	Liable	No comments.
Purchased leave	Liable	An employee buys extra leave to use over the year.

Q R

Table 8: The liability status of wages and payments beginning with Q and R.

Wage / Payment	Liability status	Comments
Quarters / Housing	Liable	See Fringe Benefits Tax Assessment Act 1986. Read fringe benefits for more details.
Redirected wages (also known as third party payments)	Liable	Read director's fees and other payments and third party payments for more details.
Redundancy benefit scheme payments	Not liable	No comments.
Redundancy payments	Liable (income tax component only)	Read termination payments for more details. Revenue Ruling PTA 004 – Termination payments clarifies which termination payments are subject to payroll tax.
Reimbursements	Not liable	Direct reimbursements are not liable. Revenue Ruling PTA 011 – Allowances and reimbursements explains the payroll tax treatment of allowances and reimbursements paid to an employee and any person taken to be an employee.
Retirement payout	Not liable	Read termination payments for more details. Revenue Ruling PTA 004 – Termination payments clarifies which termination payments are subject to payroll tax.

S

Table 9: The liability status of wages and payments beginning with S.

Wage / Payment	Liability status	Comments
Salaries and wages	Liable	No comments.
Salary continuance insurance payments	Not liable	Insurance benefits that are paid by the insurer through the employer's payroll and not related to services performed.
Salary continuance insurance premium paid by employer	Liable	See Fringe Benefits Tax Assessment Act 1986. Read fringe benefits for more details.
Salary sacrifice	Liable	If the salary sacrifice is in exchange for fringe benefits, the grossed-up value is taxable (unless exempt). If not, the entire sacrificed amount is taxable. See Fringe Benefits Tax Assessment Act 1986. Read salary sacrifice and fringe benefits for more details.
Scholarship payments	Not liable	Not liable if payment is not in relation to or for the performance of work.
Severance payments	Liable	Read termination payments for more details. Revenue Ruling PTA 004 – Termination payments clarifies which termination payments are subject to payroll tax.
Shares / options scheme	Liable	Value liable on grant or vesting day. Read shares and options for more details.
Sick leave	Liable	No comments.
Sleepover allowances	Liable	Read accommodation allowances for more details.
Sole trader wages	Liable	Wages paid to employees of a sole trader are liable if they exceed the annual tax-free threshold. A sole trader cannot be an employee of its own entity and payments made to the sold trader are not considered wages.
Staff discounts	Liable	Read fringe benefits for more details.
Study expenses	Liable	No comments.
Study leave	Liable	Component of wages payable to an employee.
Subcontractors	Liable	Relevant contractor exemptions apply. Read contractors and the contractor exemptions guide for more details.
Subscriptions	Liable	Liable if there is a fringe benefits tax value. Read fringe benefits for more details.
Superannuation	Liable	Includes lump sum and pre-tax salary sacrifice amounts. Read superannuation for more details.
Superannuation on bonus payments	Liable	No comments.
Superannuation (penalty charges under Superannuation Guarantee Charge)	Liable	No comments.

T U

Table 10: The liability status of wages and payments beginning with T and U.

Wages / Payments	Liability status	Comments
Termination payments	Liable	The income taxable portion is liable. Statutory redundancy payments are not liable. Read termination payments for more details. Revenue Ruling PTA 004 – Termination payments clarifies which termination payments are subject to payroll tax.
Tips paid to wait staff	Not liable	Tips are not wages as they are paid at the discretion of the customer in recognition for the service provided by the person serving them.
Tool allowances	Liable	Read allowances and payroll tax for more details. Revenue Ruling PTA 011 – Allowances and reimbursements explains the payroll tax treatment of allowances and reimbursements paid to an employee and any person taken to be an employee.
Trainee wages	Liable	A rebate is available. Read apprentice and trainee wages for more details.
Trainee wages paid by not-for-profit Group Training Organisations	Exempt	Read apprentice and trainee wages and employers exempt from payroll tax for more details.
Travel allowances	Liable	Read allowances and payroll tax for more details. Revenue Ruling PTA 011 – Allowances and reimbursements explains the payroll tax treatment of allowances and reimbursements paid to an employee and any person taken to be an employee.
Trust distributions	Not liable	No comments.
Uniform allowances	Liable	Read allowances and payroll tax for more details. Revenue Ruling PTA 011 – Allowances and reimbursements explains the payroll tax treatment of allowances and reimbursements paid to an employee and any person taken to be an employee.
Unused leave	Liable	Read termination payments for more details. Revenue Ruling PTA 004 – Termination payments clarifies which termination payments are subject to payroll tax.

V W X Y Z

Table 11: The liability status of wages and payments beginning with V, W, X, Y and Z.

Wage / Payment	Liability status	Comments
Volunteer firefighters	Exempt	Read exempt wages and payments not liable for payroll tax for more details.
Vouchers	Liable	Read fringe benefits for more details.
Wages paid by employers under Jobs Plus agreements	Potentially exempt	Read exempt wages and payments not liable for payroll tax for more details.
Workers compensation	Not liable	Only statutory compulsory amounts are not liable. Read workers compensation for more details.
Workers compensation make-up pay	Liable	Read workers compensation for more details.

Payroll tax

Property tax

Land tax

Transfer duty

Royalties

Gaming and wagering tax

Health insurance levy

Insurance duty

Parking space levy

Foreign buyers and land owners

Motor vehicle duty

Passenger service levy

Emergency services levy

Income tax equivalents