Payroll tax exemptions

Exemptions, exclusions and rebates.

Exempt wages are wages that are not taxable for payroll tax purposes. They include

You can also apply for an exemption if you are one of the following types of employer

Attach a copy of your organisation’s constitution and details of the nature, aims and objects of your organisation to your application.

Payroll tax is not payable on any component of wages that is directly attributed to GST unless the wages relate to fringe benefits.

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Grouping exclusions

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If you're grouped for payroll tax purposes, the wages of all your group members are combined to determine

  • if you must register for payroll tax
  • whether you're liable for payroll tax
  • the deductable amount claimed by the Designated Group Employer
  • the rate of tax that applies to all group members.

If you're a registered employer in WA and part of a group, you may be eligible for an exclusion from grouping in relation to

  • employees used in another business
  • commonly controlled business
  • tracing of interests in a corporation
  • small groups are subsumed into one group.

We can't exclude a corporation from a group if it is related to another corporation which is a member of the group.

Professional practices may be grouped if two or more businesses use the services of a single administrative service.

Apply for an exclusion from grouping.

Indigenous wages rebate

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An employer may apply for a Payroll Tax (Indigenous Wages) Rebate if wages are paid for new indigenous employees of employers, or grouped employers, with annual Australian taxable wages of up to $15 million.

  • The employer must receive a Commonwealth Indigenous Wages Subsidy for those employees.
  • The rebate applies to WA wages paid in the first two years of employment, starting on the day the employee first commenced employment with the employer.

Eligibility requirements and related deadlines cannot be waived or extended.

Lodge and pay your payroll tax returns as required. Full records of wages paid to new indigenous workers, including source documents verifying eligibility, must be maintained so you can provide the details during the annual reconciliation process. The rebate will be paid after the reconciliation process is completed, which is expected to be in August each year.

Apply for a rebate by attaching the completed form to a web enquiry - select the ‘Indigenous Wages Declaration’ sub-category.

To qualify for this rebate, both the employer and the indigenous employee to whom the wages are paid must be eligible.

Eligible employer

An employer is eligible for an assessment year if they

  • were registered during whole or part of the year. Unregistered employers must apply for registration by no later than 7 July following the close of the financial year in which the indigenous wages were paid
  • employed an eligible employee for whole or part of the year
  • meet the threshold requirements in subsection 7(2) of the Pay-roll Tax (Indigenous Wages) Rebate Act 2012 and
  • submit all returns and information, including Australian taxable wage details if applicable, required to perform the annual reconciliation by no later than 31 December following the end of the assessment year.

Eligible employee

An employee is eligible for an assessment year if the employer receives or received an indigenous wages subsidy for them.

An employee is a new employee if they

  • commenced employment with the employer on or after 1 July 2012 and
  • were not employed by that employer, or any other employer in a group of which the employer is a member, at any time before they commenced their employment with that employer.
Page reviewed 19 September 2019