Taxes, duties, levies and royalties
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Third party payments

If an employee or director provides services to a business, all payments for that service are liable for payroll tax, regardless of who makes or receives the payments.

Wages that your business pays to an employee or a director for services provided to your business must be included in your returns, even if they're paid:

  • to someone other than the employee or director
  • by someone other than the employer
  • by someone other than the employer to someone other than the employee or director.

Payments for services can include consultancy fees paid to or received by a third party.

Third party payments to an employee

A general manager receives:

  • $50,000 in salary
  • $10,000 in superannuation
  • $50,000 in administration fees, paid to the family trust
  • $50,000 in consultancy fees, paid to a family member.

The total amount of $160,000 in gross wages must be declared for payroll tax.

Third party payments to a director

A director is paid $75,000 a year in wages and superannuation. They also receive:

  • $200,000 to the family trust
  • $100,000 to one of their family members.

The total amount of $375,000 must be declared for payroll tax.

Payroll tax assist

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

For more information about third party payments, read our common errors and case studies pages.