Payroll tax

When are wages liable? (new nexus provisions)

From 1 July 2009 the process of determining liability for payroll tax has been changed to specify the employee’s principal place of residence as the primary nexus where employees perform services in more than one jurisdiction during a month.

When the employee does not have a principal place of residence in Australia, or where it cannot be identified, the employer’s ABN registered address will be used.

It is recognised that there may be transitional and implementation issues for some employers who may have to make changes to their payroll systems. In NSW, it is permissible for anyone facing such transitional issues to make any necessary adjustments without penalty as part of the annual reconciliation process for the 2009/10 assessment year.

It is stressed that these changes only affect wages for workers providing their services across jurisdictions. Where a worker provides their services solely in one jurisdiction, as is the case for the majority of workers, tax will continue to be paid to the jurisdiction where those services are performed.

More information