22 July 2008: The pay-roll tax harmonisation band wagon continues to roll through all states in a nationwide tour which began March 2007.

This month however there was a significant change introduced into this process, according to professional services firm, Deloitte.

On 1 July 2008, a number of states and territories broadened the discretion to exclude employers from a pay-roll tax group where those employers are commonly controlled.

“This is an excellent opportunity for those employers who are currently in a pay-roll tax group to reconsider their position and apply to be de-grouped,” said Frank Klasic, employment taxes partner at Deloitte.

Klasic also pointed out, that there are a number of benefits that an employer could enjoy as a result of not being in a pay-roll tax group.

“These include no longer being liable to pay pay-roll tax in Australia or being entitled to the full pay-roll tax deduction” Mr Klasic said. “The tax savings from being successfully degrouped from a pay-roll tax group can be quite significant.”

A further significant change from the recent pay-roll tax harmonisation process is the inclusion of shares and options for pay-roll tax purposes in some states. This will be a significant tax issue for those companies that operate employee share or option schemes.

Frank Klasic
Deloitte
Employment Taxes Partner
Tel: +61 (0) 3 9208 7514
Mobile: 0410 566 673