Large businesses are single or group entities that pay $15 million or more in payroll tax a year. It includes public, private, and foreign-owned companies, government entities, partnerships and trusts.
All large businesses should regularly make sure they’re meeting their payroll tax obligations. Some of the more complex payroll tax items to be aware of include:
To establish an appropriate compliance approach, we follow our risk-differentiation framework.
Based on our profiling and risk-differentiation framework, businesses within the large segment are put in one of four broad groups: key, high, medium, or low risk. Our classification is based on a combination of quantitative and qualitative factors.
Quantitative factors are taken from analysis of data, both internal and from other agencies. Qualitative factors refer to your previous compliance history, industry insights and other perceived risk.
We aim to offer you personalised services to strengthen our relationship, and to improve voluntary compliance through education and communication.
The Framework allows us to tailor our approach and apply the best treatment based on your level of risk. Our levels of interaction with you will vary based on whether you’re classified as a ‘service’, ‘assurance’ or ‘enforcement’ focused business.
If you’re selected for a service focused audit, you’re perceived as a key or low risk business. When conducting an audit with a service focus, our team will:
A service focused audit can change to an assurance or enforcement focus, based on your compliance.
If you’re selected for an assurance focused audit, you’re perceived as a key, low, medium or high risk business. When conducting an audit with an assurance focus, our team will:
An assurance focused audit can change to either a service or enforcement focus, based on your compliance.
If you’re selected for an enforcement focused audit, you’re perceived as a medium or high risk business. When conducting an audit with an enforcement focus, our team will:
An enforcement focused audit can change to an assurance focus, based on your compliance.
Whether you’ve been selected for an audit or not, we expect you to:
We’ve identified common errors affecting large businesses. It may be helpful to look at these when completing your monthly and annual payroll tax returns.
Employer superannuation top up payments in excess of the normal cost contribution paid into a defined benefit plan may be distributed between exempt and liable wages.
Exempt contributions refers to accumulation funds relating to pre 1 July 1996 services. This would generally only have been made by employers shortly after 30 June 1996.
For funds with a surplus, the exempt contribution equals that part of the employer’s contribution that is in excess of the adjusted normal cost contribution multiplied by the exempt proportion.
For funds with a deficit, the exempt contribution equals that part of the employer’s contribution that is in excess of the normal cost contribution multiplied by the exempt proportion.
For more information, read the Revenue Ruling PTA 040.
Shares and options granted by an employer to an employee for services performed are classed as wages.
To determine whether your client is liable for shares and options, you should understand these rules:
To help you understand ESS, read some of our case studies.
Payments to contractors performing work under a relevant contract are liable for payroll tax unless the contract meets one of the seven exemptions:
The most common mistakes for large customers include:
Find out more about contractors.
As a large customer you have access to auditors experienced in dealing with large businesses. Our dedicated large business team is ready to help you.
If you have any questions or would like to make a voluntary disclosure, contact us.
Find out more about voluntary disclosures.