All wages (including superannuation, allowances and fringe benefits) paid to apprentices and trainees are liable for payroll tax purposes and must be included in your returns.
However, you can claim a payroll tax rebate on wages paid to approved apprentices and only new entrant trainees who are recognised by the NSW Department of Industry (NSW DOI).
An apprentice/trainee is defined in the Apprenticeship and Traineeship Act 2001.
For information on common errors, read our common errors page.
You can claim the rebate on all wages paid to approved NSW DOI apprentices. There are no time restrictions that apply to apprentices.
Not all trainees are eligible for the rebate. As a general rule, you can claim the rebate on wages paid to trainees classified by NSW DOI as ‘new entrant trainees’ but not for ‘existing worker trainees’.
You need to understand the approval requirements, set by NSW DOI, before claiming the rebate. We only accept claims for trainees recognised by NSW DOI as new entrant trainees.
You should seek clarification from NSW DOI if you’re unsure about the status of your trainees.
Generally, you cannot claim a rebate for trainees who have been continuously employed by you for more than three months full-time or 12 months casual/part-time immediately before starting employment as a trainee.
A person who has been employed by a company for two years decides to begin a traineeship. The company cannot claim the apprentice and trainee rebate on the employee's wages because the trainee is an existing worker. This is an ineligible traineeship.
A new employee has just completed a two-month probationary period. At the end of this period they were approved by NSW DOI to start a fixed-term traineeship. This is an eligible traineeship and the employee's wages are eligible for the payroll tax rebate.
We only accept claims for trainees who are recognised by NSW DOI as new entrant trainees. For more information about new entrant trainees, refer to NSW DOI’s new entrant trainee eligibility requirements.
Once an employee completes a traineeship, they may be eligible to claim the rebate if they enter into another traineeship.
Our monthly calculator and annual reconciliation calculators will automatically calculate the rebate and offset it against your payroll tax liability. It’s important to include your apprentice/trainee wages in the relevant fields of the monthly calculator and annual reconciliation to receive the rebate.
This example calculation for July 2018 will help you calculate your rebate manually.
|With apprentice and trainee wages||Without apprentice and trainee wages|
|Apprentice and trainee wages||$80,000||nil|
|Total NSW wages||$240,000||$160,000|
|Rebate value = ($9,145.54 - $4,785.54) = $4,360.00|
If a business also has interstate wages, including the apprentice/trainee wages this will affect the threshold entitlements between each state/territory.
For more information, read our case studies page.
All wages paid by an approved non-profit Group Training Organisations (GTO) are exempt from payroll tax.
The employer can hire a trainee or apprentice. An apprentice that is employed directly by the employer for the whole term of the apprenticeship is known as an indentured apprentice.
A GTO is an arrangement where it recruits potential and/or existing apprentices and trainees under a training contract and places them with a ‘host’ employer. As the employer, the GTO’s are responsible for paying any wages, allowances, superannuation, workers’ compensation, sick/holiday pay and other employment benefits.
Under the Payroll Tax Act 2007, the employer is entitled to claim the rebate. This means that the GTO can claim the rebate, and the ‘host’ employer is not entitled to the apprentice/trainee rebate.