Exempt wages
Aboriginal persons
Wages paid to an aboriginal person who is employed under an employment project are exempt from payroll tax.
An employment project is an employment project under the Community Development Employment Project funded by the Department of Employment and Workplace Relations of the Commonwealth or the Torres Strait Regional Authority.
Adoption and maternity leave
An exemption applies to maternity or adoption leave paid in addition to an employee's normal leave entitlements. Annual, sick, recreation, long service leave or any similar leave taken while the employee is absent due to pregnancy is not exempt.
Contributions to redundancy benefit schemes/portable long service leave funds
An exemption applies to contributions made by employers to a portable long service leave scheme as long as they are not taxable for fringe benefit tax (FBT) purposes. The same exemption applies to contributions made by an employer to a redundancy or severance scheme (retrospective to 1 July 2006).
Defence force personnel
Wages paid to a person whilst on military leave as a member of the Defence Forces of the Commonwealth or the armed forces of any part of the Commonwealth of Nations are not liable for payroll tax.
Emergency operations
Wages, except leave payments, paid to an employee taking part in emergency operations as a member of an emergency service organisation under the State Emergency and Rescue Management Act 1989 or paid to an employee taking part in bushfire fighting activities as a volunteer member of a rural fire brigade under the Rural Fires Act 1997 are exempt from payroll tax.
Redundancy payments and severance pay
That part of an employment payment that is not assessable as income for an employee is not liable for NSW payroll tax. This will usually be a redundancy payment that does not exceed the allowable income tax exempt limits.
Workers compensation
Payments made by an insurer and compulsory payments required under the Workers Compensation Act are not liable for payroll tax. 'Make up pay', being additional wages paid by an employer representing the difference between the employees regular pay and the compensation payments, is liable for payroll tax.
