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Payroll Tax Changes

Western Australian employers hiring trainees or apprentices, please note the Department of Finance have released an update to Payroll Tax due to legislation receiving Royal Asset.

Removal of Payroll Tax Exemption for Wages Paid to Trainees – 1 July 2019

Taxable wages – trainees
Wages paid to trainees under a training contract registered from 1 July 2019 under the Vocational Education and Training Act 1996 (‘VET Act’) are liable to payroll tax.

Pre 1 July 2019 – trainees under training contracts
Wages paid to an eligible trainee under a training contract registered prior to 1 July 2019 under the VET Act are exempt from payroll tax.
Transitional arrangements apply to continue the exemption for the remaining nominal term of the training contract.

Exempt wages – apprentices
Wages paid to an apprentice registered for a class A or class B qualification under the VET Act are not taxable for the duration of the training contract.
Where a training contract is suspended, wages paid to an apprentice must be declared as taxable wages during the period of suspension.

The difference between an apprenticeship and a traineeship per the WA Department of Education is:

The difference between a traineeship and an apprenticeship is that a traineeship can be either a full-time or part-time employment based training arrangement, usually for around 12 months (apprenticeships usually last for three to four years learning a trade) and is generally in a non-trade related area.

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