Taxable Victorian wages

Definition

Taxable Victorian wages are the total wages taxable under Victorian legislation before subtraction of the allowable deduction.

Components definition

Taxable wages for Victorian payroll tax purposes are broken up into components for the reconciliation.

Taxable and non-taxable components

Please ensure you do not include non-taxable components.

Use this checklist to help you determine the taxability of certain payments for the financial year.

Determining liability in Victoria

From 1 July 2009, wages paid or payable in respect of each monthly return period are subject to payroll tax in Victoria when during the month, the employee has wholly performed services in Victoria.

Where an employee has not wholly performed services in Victoria, the legislation provided the following tiered test to determining payroll tax liability.

  1. Payroll tax is payable in the jurisdiction where the employee's principal place of residence (PPR) is located.
  2. If an employee does not have a PPR in any Australian jurisdiction during the relevant month, payroll tax is payable in the jurisdiction where the employer has registered their Australian Business Number (ABN) address. If the employer does not have a registered ABN address, or has two or more ABN addresses in different jurisdictions, payroll tax is payable in the jurisdiction where the employer has their principal place of business (PPB).
  3. If the employee does not have a PPR in any Australian jurisdiction and the employer does not have an ABN address or PPB in any Australian jurisdiction, payroll tax is payable in the jurisdiction where the wages are paid or payable in that calendar month. If wages are paid or payable in a number of jurisdictions, payroll tax is paid in the jurisdiction where the largest proportion of wages is paid. If wages are paid by the employer into an employee's bank account, the wages are deemed to be paid in the jurisdiction in which the employee holds his or her bank account.
  4. If both the employee and employer are not based in any Australian jurisdiction and wages are not paid in Australia, a payroll tax liability arises in Victoria if the services are mainly performed in Victoria in that calendar month (that is, the work performed in Victoria during that month is greater than 50 per cent).

Where an employee working in another country for an assignment of less than six months, wages paid or payable to that employee in Victoria are taxable in Victoria. If the wages are paid in more than one Australian jurisdiction, payroll tax is payable on the full amount of wages paid in the Australian jurisdiction in the jurisdiction where the largest proportion of wages is paid.

Wages are exempt if the employee has worked in another country for a continuous period of more than six months.

Any wages that relate to services performed offshore and beyond the limits of any Australian jurisdiction but not in another country, are taxable if they are paid or payable in Victoria irrespective of the duration of the assignment.

Further SRO references

See Revenue Ruling PTA-039.

Assistance

If you need further information on this topic, please contact our payroll tax enquiry service on 13 21 61.