Statutory authorities
Statutory authorities whose staff are employed in the Government Service?
Statutory authorities, including State owned corporations and subsidiary companies are entitled to claim a separate threshold provided they are not grouped because of the application of section 71 of the Payroll Tax Act, 2007 (groups arising from the use of common employees).
Since 2006 most statutory authorities are not permitted to employ staff and as their staff are employed in Divisions of the Government Service under Chapter 1A of the Public Sector Employment and Management Act, 2002. Each Division of the Government Service specified in Part 1 or 2 of Schedule 1 of that Act must lodge a separate payroll tax return. The return must include the taxable wages of the staff employed in the Government Service plus other amounts paid or payable by the relevant statutory authorities that constitute wages for payroll tax purposes, such as fees paid by such authorities to Board members and to contractors who are deemed to be employees under Division 7 of Part 3 of the Payroll Tax Act, 2007.
If a Division is the responsible employer of staff employed in the Government Service to enable one or more statutory authorities to exercise its functions (as authorised by section 4B(3) of the Public Sector Employment and Management Act, 2002), that Division is the employer of those staff for payroll tax purposes.
A non-public service Division which is not listed in Schedule 3 of the Public Finance and Audit Act, 1983 is entitled to the benefit of the threshold. If such a Division is the responsible employer of staff employed in more than one statutory authority, and separate Branches of the Division have been established to employ staff who are assigned to a particular statutory authority, then each Branch is an employer for payroll tax purposes. Section 4D(3) of the Public Sector Employment and Management Act, 2002 authorises a Division head to establish separate Branches. In such cases each Branch must lodge a separate payroll tax return, and is entitled to the threshold unless it is grouped by virtue of the common use of employees under section 71 of the Payroll Tax Act, 2007.
