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Trainees and New Payroll Tax Legislation Amendments – How is your Business Affected?

Does your business employ trainees? If so, be aware that the payroll tax exemption for trainee wages has now been removed. As payroll tax is self-assessed, the onus is on you as an employer to ensure the information you provide to the government is correct, and that you comply with your tax obligations. The Department of Finance has a Payroll Tax Employer Guide which has further details about your obligations and what’s expected of you.

What’s changed?

Put simply, the Pay-roll Tax Assessment Act 2002 (The Act) outlined an exemption from payroll tax for wages paid to eligible trainees. The Pay-roll Tax Assessment Amendment Act 2019 received Royal Assent on 12 June 2019, and removes this exemption.

What about my existing trainees?

For training contracts lodged for registration between 1 December 2017 and 30 June 2019, transitional arrangements will apply. Existing eligible training contracts lodged under the Vocational Educational and Training (VET) Act 1996 during this period will still be exempt for the remaining term of the contract. To illustrate: For an eligible new employee who started a full-time traineeship on 15 November 2018, with a one-year term set to expire on 15 November 2019, the exemption would remain.

Are non-trainees affected?

Put simply, no – this amendment to the Act only affects trainees. It does not apply to apprentices, wages paid to them will continue be exempt from payroll tax, and the payroll tax rules around other employee types are also unaffected.

If you’re not sure about your payroll tax obligations, or any other tax or business matters, do not hesitate to contact McKinley Plowman. Our experience and expertise in business means we’re across all of the legislation and regulations that apply to businesses, and can help your business remain compliant. Call us on 08 9301 2200 or visit

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