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  • Checklist of liable and exempt items
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Checklist of liable and exempt items

A quick guide to assist you to understand liable and exempt wages.

A

Wage typeLiability statusComments
Accommodation allowancesExempt component applies 
Adoption leaveExempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of payPaid in addition to normal leave
AllowancesLiableAll types liable except for exempt component for motor vehicles and accommodation
Apprentice wagesLiableRebate scheme applies

B C

Wage typeLiability statusComments
Back payLiable 
BenefitsLiable 
BonusesLiable 
CommissionsLiable 
Contractor payments under a relevant contractLiableRelevant contractor provisions apply

D E

Wage typeLiability statusComments
Defence Force paymentsExemptFor time taken as military leave
Directors feesLiable 
DividendsNot liableReturn on investment is not liable
Early retirement scheme benefitsLiable (income taxable component only) 
Employment termination paymentLiable (income taxable component only)Statutory redundancy components not liable
Emergency operationsExemptFor wages paid to a volunteer member involved in emergency operations
Employment agency paymentsLiableEmployment agency itself is liable for on-hire contracts unless end user is exempt

F G

Wage typeLiability statusComments
Free holidaysLiableAs per Fringe Benefits Tax Assessment Act 1986
Fringe benefitsLiableAs per Fringe Benefits Tax Assessment Act 1986
Gifts related to serviceLiable 
Gifts unrelated to serviceNot liableFringe benefits tax limits apply
Golden handshakesLiableEmployment termination payment
Gross wagesLiable

H I J

Wage typeLiability statusComments
Holiday payLiable 
Indigenous employees (payments made to)Exempt under certain conditionsWages exempt if an approved project
Jury duty (employer payments)LiablePayments made by an employer to an employee are liable wages
Jury duty (court payments)Not liablePayments made by the court system to an employee are not liable wages

K L M

Wage typeLiability statusComments
Leave paid outLiableAll unused leave paid out
Leave loadingLiable 
Living away from home allowanceLiableAs per Fringe Benefits Tax Assessment Act 1986
LoansLiableAs per Fringe Benefits Tax Assessment Act 1986
Long service leaveLiable 
Make up payLiablePayments additional to compulsory workers compensation amounts
Maternity leaveExempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of payPaid in addition to normal leave
Meal moneyLiableDeclared as an allowance
Motor vehiclesLiableAs per Fringe Benefits Tax Assessment Act 1986
Motor vehicle allowances paid as flat or fixed amountExempt component appliesApplies to business use of private vehicles
Motor vehicle allowances paid on per kilometre basisNot liableApplies to business use of private vehicles. The car expense payment is exempt under the Fringe Benefits Tax Assessment Act 1986

N O P

Wage typeLiability statusComments
OvertimeLiable 
Paid parental leave (PPL) paid by the Commonwealth GovernmentNot liable 
Partnership drawingsNot liable 
Paternity leaveExempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of payPaid in addition to normal leave
Payments in lieu of noticeLiableEmployment termination payment
Piece work paymentsLiableFor payments by quantity of output
Portable long service leave fund paymentsNot liable 
PrizesLiableAs per Fringe Benefits Tax Assessment Act 1986

Q R

Wage typeLiability statusComments
Quarters/housingLiableAs per Fringe Benefits Tax Assessment Act 1986
Redundancy paymentsLiable (income taxable component only)Statutory redundancy component not liable
ReimbursementsNot liableMust be a business expense which is accounted for
Retirement payoutLiableAll unused leave is liable

S

Wage typeLiability statusComments
Severance paymentsLiableEmployment termination payment
Service contracts (Contract of service)LiableIf there is an employer/employee relationship
Shares/options schemeLiableDeclare market value at granting or vesting date (conditions apply)
Shift allowancesLiable 
Sick leaveLiable 
Staff discountsLiableAs per Fringe Benefits Tax Assessment Act 1986
Study leaveLiable 
SubcontractorsLiable unless exemption appliesRelevant contractor provisions apply
SubscriptionsExempt component appliesAs per Fringe Benefits Tax Assessment Act 1986
SuperannuationLiableIncluding all lump sum and pre-tax effective salary sacrifice amounts

T U

Wage typeLiability statusComments
Termination paymentsLiable (income taxable portion only)Statutory redundancy components not liable
Tool allowancesLiable 
Trainee wagesLiableRebate scheme applies
Travel allowancesLiable 
Trust distributionsNot liable 
Uniform allowanceLiable 
Unused leaveLiableTermination payments

V W X Y Z

Wage typeLiability statusComments
Volunteer firefightersExemptFor wages paid while involved in fire fighting activities
VouchersLiableAs per Fringe Benefits Tax Assessment Act 1986
Workers compensationNot liableOnly statutory compulsory amounts are not liable

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