Apprentice and trainee wages

Payroll tax

You must include the wages paid to apprentices and new entrant trainees in your payroll tax calculation, including superannuation, allowances and Fringe Benefit Tax.

What is the rebate for apprentice and trainee wages?

New South Wales (NSW) introduced a payroll tax rebate on wages paid to apprentices and new entrant trainees recognised by the NSW Department of Industry (NSW DOI) and under the definition of an apprentice or trainee in the Apprenticeship and Traineeship Act 2001.

You cannot claim a rebate for trainee wages when the trainee has been continuously employed by you for more than three months full-time or 12 months casual or part-time immediately prior to commencing employment as a trainee (existing worker trainee).

We will only accept claims for a rebate if the NSW DOI accepts the trainee as a new entrant trainee. If you are unsure, you should seek clarification from NSW DOI regarding the status of your trainees.

How do I claim the rebate?

The rebate is a self-administered scheme allowing the rebate amount to be calculated and offset against the monthly payments and annual reconciliation.

If you use your own spreadsheet or a commercial software package, such as MYOB, to calculate your monthly payment, you have the option of either determining your own monthly offset or claiming it at the end of the financial year.

How do I calculate the rebate?

The rebate can be claimed monthly or annually as part of your return.

July 2018 NSW wages = $240,000 (including $80,000 apprentice and trainee wages “A/T”)

Threshold July 2018 = $72,192

Taxable wages with A/T less the threshold = $167,808 ($240,000 – $72,192)

Taxable wages without A/T less the threshold = $87,808 ($160,000 – $72,192)

Tax payable with A/T = $9,145.54 ($167,808 x 5.45%)

Tax payable without A/T = $4,785.54 ($87,808 x 5.45%)

Rebate value = $4,360.00 ($9,145.54 – $4,785.54)

For example payroll tax calculations, download the example calculations for the monthly calculator and annual reconciliation.

Note: if you also have interstate wages, the inclusion of the apprentice and/or trainee wages will affect threshold deduction entitlements between each State and/or Territory.

I am a non-profit group-training organisation, do I need to declare the wages?

No, wages are exempt if they are paid to an employee who is employed by a non-profit group-training organisation in accordance with a group apprenticeship or traineeship scheme approved by NSW DOI.

What common errors are made when claiming the rebate?

Some of the common errors made when claiming the rebate include:

  • continuing to apply old rules by claiming an exemption instead of the rebate by not including apprentice and/or trainee wages after 1 July 2008

  • apprentices and/or new entrant trainees not registered with NSW DOI

  • continuing to claim the rebate despite the worker no longer being considered an apprentice or new entrant trainee by NSW DOI

  • not claiming the rebate despite being eligible

  • only claiming the rebate on apprentice/trainee hourly wages, instead of including all remuneration such as superannuation, allowances and bonuses.

Last updated: 28 June 2018