• Changes to Pay-roll Tax

    Published 8 June 2009

    From 10 June 2009, section 40(2)(m) has been amended and s40(2)(p) has been abolished entirely. Section 40(2)(m) will now read:

    (m) by an employer to or in relation to a person who is an apprentice under a training contract registered under the Vocational Education and Training Act 1996 Part 7 Division 2; or

    What does this mean in practical terms?

    There is no change to the current arrangements if trainees’ wages payable by an employer were considered exempt before 10 June 2009.

    Section 40(2)(m) now ties a pay-roll tax exemption to “an apprentice under a training contract registered…”, so in order to qualify for exemption three criteria must now be met:

    • The employee must be an apprentice, and
    • There must be a training contract in place, and
    • The contract must be registered.

    Note that under the new provisions there is no mention made of “trainee” or “probationer”. However, “apprentice” means a person who is named in a training contract as the person who will be trained under the contract whether the person is termed an apprentice, trainee, cadet, intern or some other term. (Section 60A, Division 1 of Part 7 Vocational Education and Training Act 1996)

    As a “trainee” falls within the definition of “apprentice”, the exemption for trainees still applies.

    A “probationer” is no longer catered for by s40(2)(m) and is therefore no longer exempt.

    In broad terms a “training contract” is a training contract taken out between the employee and the employer. The contract must be registered with the Department of Education and Training. “Training contract” is also defined in the Vocational Education and Training Act.

    In order to qualify for a pay-roll tax exemption under s40(2)(m), for training contracts taken out from 10 June 2009 onwards, the wages must be paid or payable:

    • in relation to an “apprentice” (as defined),
    • …who must be party to a contract signed between the employee/employer, and
    • the contract is registered with the DET.

    Should you have any queries or require further clarification, please do not hesitate to contact our office on (08) 9262 1395 or email payroll@dtf.wa.gov.au

    Published date: 08 June 2009