Bonuses and commissions paid or payable to an employee are defined as wages and are therefore liable for payroll tax. These payments are either included in the employee’s gross wages or shown separately on the employee’s PAYG withholding statement.
A bonus or commission is said to be paid when it is credited or given to the employee within any month. It is payable when the employee is entitled to the payment within any month.
If the bonuses and/or commissions are recorded as an expense and have not been paid to the employee(s), you can declare these wages when they are paid. These expensed amounts should be paid within twelve months of the date they were incurred. If not, you can include these amounts as liable for payroll tax.
For example, if you record the bonuses/commissions as an expense in April but they were not paid until the following month in May, you can declare it as liable for payroll tax when you lodge your May payroll tax return.
If you pay a bonus that does not relate to any particular month (bonus payment accrued over several months), the payment will be considered to be services performed in the month it’s paid. For example, if you make a bonus payment in June, it will be considered to be for services performed in June.
Commissions include all payments based on sales and are liable for payroll tax even if they’re the only payments received by an employee.