Western Australia
Tue 16 January 2018

Payroll tax changes to affect civil construction traineeships

CCF WA Members are reminded that the State Government recently removed the payroll tax exemption previously available to existing workers undertaking traineeships.

From December 1, 2017, the payroll tax exemption for trainees will be restricted to new employees with annual wages of $100,000 or less at the date of lodgement of the training contract with the Department of Training and Workforce Development (DTWD).

A new employee is an employee that has been continuously employed for not more than three months full-time or not more than 12 months casual or part-time, or a combination of both, immediately prior to the commencement date of the training contract. This period includes any period where the employee had been employed by another member of the same group of employers.

Existing employees whose training contract was lodged with DTWD prior to December 1, 2017 will continue to be eligible for the payroll tax exemption until the expected completion date as specified in the training contract without further extension, suspension or change to part-time, provided the employee’s annual wages did not exceed $100,000 at the lodgement date of the training contract.

While the announced changes are not yet law, the State Government has made it clear the changes will be applied retrospectively from December 1, 2017.  The Government is encouraging employers lodging payroll tax returns on a monthly or quarterly frequency to declare wages paid to affected trainees as taxable wages in their December 2017 return onwards. Employers lodging payroll tax returns on an annual frequency should declare wages paid to affected trainees as taxable wages in their June 2018 return.

Employers who wait for the Bill to be passed before declaring wages paid to affected trainees as taxable wages must make an adjustment to their 2017-18 declared taxable wages following the passage of the legislation. Any additional tax resulting from the adjustment will be payable by the due date of the relevant return period.

Click here for the full Department of Finance Circular

Click here for the CCF WA media release