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Taxes, duties, levies and royalties
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    How to meet your obligations and make payments.

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In this section
  1. New business
  2. Growing business
  3. Large business

Large business

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:

  • employment agencies
  • shares and options
  • superannuation (defined benefits)
  • grouping
  • contractors
  • exempt wages.

Compliance

To establish an appropriate compliance approach, we follow our risk-differentiation framework.

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.

Our treatment

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.

Service focus

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:

  • assist you with legislation
  • make it easy for you to comply
  • provide educative tools with a tailored approach.

A service focused audit can change to an assurance or enforcement focus, based on your compliance.

Assurance focus

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:

  • provide you with the right tools and products to improve voluntary compliance
  • apply an advisory assurance audit to minimise your perceived risk
  • apply a limited range of compliance assurance tools including internal and external specialist advice
  • build and maintain our relationship with you, highlighting educational areas.

An assurance focused audit can change to either a service or enforcement focus, based on your compliance.

Enforcement focus

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:

  • provide you with highly skilled and agile auditors to conduct a face-to-face audit
  • apply a full range of compliance enforcement tools including internal and external specialist advice
  • work together with you and your agents to provide assistance and education where required.

An enforcement focused audit can change to an assurance focus, based on your compliance.

Our expectations

Whether you’ve been selected for an audit or not, we expect you to:

  • keep us informed of any changes impacting your compliance
  • provide information in a timely manner
  • keep sufficient and relevant records for up to five years, including accessible soft copy documents and payroll tax return workings
  • comply with the audit requests
  • conduct regular internal reviews, and notify us immediately of any errors
  • maintain and update your payroll tax procedure.

Common errors

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.

Defined benefit plans - superannuation contributions

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.

Employee share schemes (ESS)

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:

  • what constitutes a relevant day
  • calculating taxable wages
  • dividend equivalents.

To help you understand ESS, read some of our case studies.

Contractors

Payments to contractors performing work under a relevant contract are liable for payroll tax unless the contract meets one of the seven exemptions:

  1. services provided for 90 days or less in a financial year
  2. services required for 180 days or less in a financial year
  3. services performed by two or more people
  4. services ancillary to the supply of goods
  5. services not ordinarily required by your client’s business
  6. services provided to the public generally (as approved by the Commissioner)
  7. services provided by an owner-driver.

The most common mistakes for large customers include:

  • claiming the 180-day exemption as an extension of the 90-day exemption
  • not keeping sufficient records to substantiate an exemption
  • understanding whether the worker is an independent contractor or common law employee
  • identifying whether the engagement is a relevant contractor employment agency arrangement.

Find out more about contractors.

We are here to help

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.

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