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Checklist of liable/exempt items

Checklist of liable/exempt items

A to C

Wage type	Liability status	Comments
Aboriginal Persons (payments made to)	Exempt under certain conditions	Wages exempt if an approved project
Accommodation allowances	Exempt component applies
Adoption leave	Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.	Paid in addition to normal leave
Allowances	Liable	All types liable except for exempt component for motor vehicles and accommodation
Allowances paid to non-working directors	Not liable
Apprentice wages	Liable	Rebate scheme applies
Back pay	Liable
Benefits	Liable	As per Fringe Benefits Tax Assessment Act 1986
Bonuses	Liable
Commissions	Liable
Contractor payments (Contract for service)	Liable unless exemption applies	Relevant contractor provisions apply

D to G

Wage type	Liability status	Comments
Defence Force payments	Exempt	For time taken as military leave
Directors fees	Liable	Deemed wages
Dividends	Not liable	Return on investment is not liable
Early retirement scheme benefits	Liable (income taxable component only)
Employment Termination Payment (ETP)	Liable (income taxable component only)	Statutory redundancy components not liable
Emergency Operations	Exempt	For wages paid to a volunteer member involved in emergency operations
Employment agencies payments	Liable	Employment agency itself is liable for on-hire contracts unless end user is exempt
Free holidays	Liable	As per Fringe Benefits Tax Assessment Act 1986
Fringe benefits	Liable	As per Fringe Benefits Tax Assessment Act 1986
Gifts related to service	Liable
Gifts unrelated to service	Not liable	Fringe benefits tax limits apply
Golden handshakes	Liable	Employment Termination Payment
Gross wages	Liable

H to P

Wage type	Liability status	Comments
Holiday pay	Liable
Jury Duty (employer payments)	Liable	Payments made by an employer to an employee are liable wages
Jury Duty (court payments)	Not liable	Payments made by the court system to an employee are not liable wages
Leave paid out	Liable	All unused leave paid out
Leave loading	Liable
Living Away from Home Allowance (LAFHA)	Liable	As per Fringe Benefits Tax Assessment Act 1986
Loans	Liable	As per Fringe Benefits Tax Assessment Act 1986
Long service leave	Liable
Make up pay	Liable	Payments additional to compulsory workers compensation amounts
Maternity leave	Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.	Paid in addition to normal leave
Meal money	Liable	Declared as an allowance
Meals	Liable	As per Fringe Benefits Tax Assessment Act 1986
Motor vehicles	Liable	As per Fringe Benefits Tax Assessment Act 1986
Motor vehicle allowances paid as flat or fixed amount	Exempt component applies	Applies to business use of private vehicles
Motor vehicle allowances paid on per kilometre basis	Not liable	Applies to business use of private vehicles. The car expense payment must be exempt under the Fringe Benefits Tax Assessment Act 1986
Overtime	Liable
Paid parental leave (PPL) paid by the Commonwealth Government	Not Liable
Partnership drawings	Not liable
Paternity leave	Exempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.	Paid in addition to normal leave
Payments in lieu of notice	Liable	Employment Termination Payment
Piece work payments	Liable	For payments by quantity of output
Portable long service leave fund payments	Not liable
Prizes	Liable	As per Fringe Benefits Tax Assessment Act 1986

Q to Z

Wage type	Liability status	Comments
Quarters/Housing	Liable	As per Fringe Benefits Tax Assessment Act 1986
Redundancy Payments	Liable (income taxable component only)	Statutory redundancy component not liable
Redundancy benefit scheme payments	Not liable	Payments made into or out of scheme
Reimbursements	Not liable	Must be a business expense which is accounted for
Retirement payout	Liable	All unused leave is liable
Severance payments	Liable	Employment Termination Payment
Service contracts (Contract of service)	Liable	If there is an employer/employee relationship
Shares/options scheme	Liable	Declare market value at granting or vesting date (conditions apply)
Shift allowances	Liable
Sick pay	Liable
Staff discounts	Liable	As per Fringe Benefits Tax Assessment Act 1986
Study leave	Liable
Study expenses	Liable	As per Fringe Benefits Tax Assessment Act 1986
Subcontractors	Liable unless exemption applies	Relevant contractor provisions apply
Subscriptions	Liable	As per Fringe Benefits Tax Assessment Act 1986
Superannuation	Liable	Including all lump sum and pre-tax effective salary sacrifice amounts
Termination payments	Liable (income taxable portion only)	Statutory redundancy components not liable
Tool allowances	Liable
Trainee wages	Liable	Rebate scheme applies
Travel allowances	Liable
Trust distributions	Not liable
Uniform allowance	Liable
Unused leave	Liable	Termination Payments
Volunteer firefighters	Exempt	For wages paid while involved in bushfire fighting activities
Vouchers	Liable	As per Fringe Benefits Tax Assessment Act 1986
Workers compensation	Not liable	Only statutory compulsory amounts are not liable

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Last updated: 02-Jul-2012