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Payroll Tax
Frequently Asked Questions

What is payroll tax?

Payroll tax is a general purpose state tax that is calculated on wages paid or payable by employers, and applies in all Australian states and territories. In the Northern Territory (NT), payroll tax is assessed at a rate of 5.9 per cent on wages paid by an employer in relation to their Northern Territory taxable wages. Payroll tax is collected and administered in the NT in accordance with the Pay-roll Tax Act.

The tax is self-assessed. The employer calculates the liability and then pays the appropriate amount to Territory Revenue Office, usually by way of monthly returns or annual adjustment returns. In the NT, payroll tax is paid into a consolidated holding account and is used to meet the costs of essential public services such as education, health, public safety and law and order.

What are Northern Territory wages?

Generally, wages are liable to payroll tax in the Northern Territory (NT) where:

-		they relate to work performed wholly in the NT for a return period of one month; or
-		the wages are paid or payable in the NT, but the work is not wholly performed in another state or territory.

For more information on wages liable to payroll tax in the NT, refer to the chapter 'Wages subject to payroll tax' in the Employers' Guide to Payroll Tax in the Northern Territory.

What do I include as wages?

'Wages' includes:

-		wages
-		remuneration
-		salaries
-		bonuses
-		commissions
-		allowances
-		employment termination payments and accrued leave paid on termination
-		fringe benefits
-		shares and options
-		employer-funded (pre-income tax) superannuation contributions
-		any remuneration paid to or in relation to company directors or members of the governing body (e.g. directors' fees)
-		a payment made by a partnership by way of remuneration to a partner
-		payments to contractors in certain circumstances
-		payments made by labour hire agents to workers on-hired.

For more detailed information on what wages are subject to or exempt from payroll tax, refer to the chapters headed ‘Definition of Wages’ and ‘Exempt Wages and other Non –liable Payments’ in the Employers’ Guide to Payroll Tax in the Northern Territory.

What is the rate of payroll tax and threshold?

Click here for the current and historical thresholds and rates for payroll tax.

When is tax payable?
Tax is payable by the 21^st of the month following the return period it relates to. For example, an employer on monthly frequency must pay their tax for July 2006 by 21 August 2006.

When must I register for payroll tax?

From 1 July 2006, an employer must register for payroll tax in the Northern Territory (NT) if their or they are a member of a group, the group's total Australian taxable wages exceed the exemption level of $104 167 per month ($1 250 000 per annum). If their or the group's total Australian taxable wages exceed either of these amounts, they will only be liable for payroll tax in the NT on the NT proportion of their taxable wages. For more information on how to calculate the tax, refer to the chapter headed 'Calculation of Payroll Tax' in the Employers' Guide to Payroll Tax in the Northern Territory.

How does ‘Grouping’ affect my payroll tax liability?

Under the payroll tax scheme, certain businesses that are related or associated entities, are ‘grouped’ for the purpose of paying payroll tax. Where businesses are grouped, the combined wages of the members are used to determine if a liability to register exists and the amount of any allowable deduction.

For further information on 'grouping of businesses', refer to the chapter headed 'Grouping Businesses' in the Employers' Guide to Payroll Tax in the Northern Territory.

If I am liable, what must I do?

You must register for payroll tax in the month following the month that your wages first exceed the monthly exemption threshold by completing an Application for Registration as an Employer form. This application form can be obtained from our website, alternatively, you may request a form be sent or faxed to you.

Forms can be lodged with Territory Revenue Office by post or by facsimile.  Refer to our contacts page for details of how to contact us.

Once registered, you may elect to lodge your returns through TRMeR, TRO’s online return lodgement and payment system. Alternatively, TRO will issue you a paper returns package.

Generally, returns are required to be lodged on a monthly basis. However, if your estimated liability does not exceed $8 400 a year, TRO may approve the lodgement of an annual return.

Are Employment Termination Payments liable to payroll tax?

Certain components of termination payments are subject to payroll tax. For more information, refer to ‘Employment Termination Payments’ in the chapter headed ‘Definition of Wages’ in the Employers' Guide to Payroll Tax in the Northern Territory.

Are payments to contractors liable?

Payments to contract workers will be taxable if an employee/employer relationship exists between the employer and the worker. Further information on how Territory Revenue Office regards contract workers can be obtained from Commissioner's Guideline CG-PRT-002: Employer/employee relationship (employees and independent contractors).

Are payments for unused leave and sick leave liable to tax?

Payments made to employees for any unused rostered days off or unused leave (for example, sick or annual) are subject to payroll tax. For more information refer to 'Wages and salaries' in the chapter headed 'Definition of wages' in the Employers' Guide to Payroll Tax in the Northern Territory.

What information brochures do you have?

Territory Revenue Office (TRO) has published the Employers' Guide to Payroll Tax in the NT to provide employers and their advisers with a summary of the Northern Territory payroll tax scheme, information on ‘wages’, grouping provisions, fringe benefits, superannuation and how to calculate payroll tax liabilities.

TRO also has a number of publications and forms to assist you in understanding payroll tax and your obligations. This information is available on our web site or by telephoning 1300 305 353 or (08) 8999 7949.