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  • Apprentice and trainee wages
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Apprentice and trainee wages

All wages (including superannuation, allowances and fringe benefits) paid to apprentices and trainees are liable for payroll tax.

However, you can claim a payroll tax rebate on wages paid to approved apprentices and only new entrant trainees.

The rebate can only be claimed on wages paid to apprentices/trainees that are approved by Training Services NSW under the Apprenticeship and Traineeship Act 2001. Different eligibility rules apply to apprentices and trainees.

Find out more about apprentices and trainees on our common errors and case studies page

Trainee wages

The eligibility for the rebate on wages paid to trainees is dependent on Training Services NSW’s classification of the ‘training type’. If the training is classified as a:

  • ‘new entrant traineeship’, you're entitled to claim the rebate on total wages paid to the trainee for the period they undertake that traineeship
  • ‘existing worker traineeship’, you can't claim a rebate on wages paid to the trainee.

For more information about the new entrant/existing worker status and how it’s determined, view  the Training Services NSW new entrant trainee policy.

We rely on the apprentice and trainee register maintained by Training Services NSW. If you disagree with how your trainee is classified, you’ll need to contact Training Services NSW with your concerns.

Apprentice wages

You can claim the rebate on all wages paid to Training Services NSW approved apprentices for the period of their apprenticeship. No additional eligibility rules apply.

Claiming the rebate

Our monthly calculator and annual reconciliation calculators will automatically calculate the rebate and offset it against your payroll tax liability.

To receive the correct rebate, it’s important that you include your apprentice/trainee wages in the relevant field of the monthly calculator and/or annual reconciliation, while excluding the amount from other NSW wages.

Example: calculating the rebate manually

With apprentice and trainee wages Without apprentice and trainee wages
NSW wages $160,000 $160,000
Apprentice and trainee wages $80,000 nil
Total NSW wages $240,000 $160,000
Less threshold $76,230 $76,230
Taxable wages $163,770 $83,770
Tax liability/payable $8,925.47 $4,565.47
Rebate value = ($8,925.47 - $4,565.47) = $4,360.00

If your company has interstate wages or other group members, changes to your threshold entitlement will affect the rebate you receive.

Interstate wages

Not all jurisdictions treat apprentices and trainees the same. If an interstate jurisdiction allows a rebate in respect of apprentice and trainee wages, it doesn't reduce an employer's taxable wages in that jurisdiction.  If apprentice and trainee wages are treated as exempt wages, they are excluded from the taxable wages declared in that jurisdiction.

Example: exempt wages

The employer pays interstate wages of $1 million, of which $150,000 is paid to apprentices and trainees in a jurisdiction where the wages are treated as exempt wages. In this case, interstate wages total $850,000.

Example: rebate scheme

The employer pays interstate wages of $1 million, of which $150,000 is paid to apprentices and trainees in a jurisdiction where a rebate scheme applies. In this case, interstate wages total $1 million.

Group Training Organisations

A Group Training Organisation (GTO) recruits potential and/or existing apprentices and trainees under a training contract, and places them with a ‘host’ employer.

The GTO is responsible for paying any wages, allowances, superannuation, workers compensation, sick/holiday pay and other employment benefits. As such, the GTO is the employer under the Payroll Tax Act 2007 and they must declare the wages paid in their annual returns. Only they can claim the rebate relating to apprentices/ trainees.

‘Host’ employers aren't entitled to claim the rebate as the traineeship/apprenticeship isn't registered with them and they’re not considered the worker's employer.

A payroll tax exemption is available to certain GTOs.

Training Services NSW approved non-profit GTOs are exempt from payroll tax under the Payroll Tax Act 2007. Wages paid or payable to any employee who is employed by a Training Services NSW approved non-profit GTO are exempt wages.

Exempt wages include wages paid to:

  • all apprentice and trainees employed by the GTO
  • other staff engaged by the GTO (such as admin staff and directors).

Payroll tax assist

Use payroll tax assist to help you meet your payroll tax obligations. It'll show you what wages are taxable.

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