{"id":15018,"date":"2026-03-17T17:51:51","date_gmt":"2026-03-17T12:21:51","guid":{"rendered":"https:\/\/befreeltd.com\/au\/?p=15018"},"modified":"2026-03-20T18:19:00","modified_gmt":"2026-03-20T12:49:00","slug":"payroll-tax-contractors","status":"publish","type":"post","link":"https:\/\/befreeltd.com\/au\/resources\/blogs\/payroll-tax-contractors\/","title":{"rendered":"Payroll Tax Contractors: Compliance Guide for Small Businesses"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"15018\" class=\"elementor elementor-15018\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-684f1151 e-flex e-con-boxed e-con e-parent\" data-id=\"684f1151\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7f80aa8c elementor-widget elementor-widget-text-editor\" data-id=\"7f80aa8c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Hiring contractors gives Australian small businesses flexibility. However, misinterpreting the rules around payroll tax for contractors can lead to substantial backdated tax liabilities, penalties, and interest.<\/p><p>Many small business owners assume that if someone has an ABN and sends invoices, payroll tax does not apply. Unfortunately, that&#8217;s not always the case \u2014 each state and territory has its own rules, and contractor payments can still attract payroll tax.<\/p><p>This guide explains how contractor payments are assessed, when they may attract payroll tax and how businesses can reduce compliance risk through structured\u00a0<a href=\"https:\/\/befreeltd.com\/au\/services\/payroll-outsourcing\/\"><u>payroll services<\/u><\/a>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-18f35e92 elementor-widget elementor-widget-heading\" data-id=\"18f35e92\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Why Payroll Tax Contractors Create Compliance Risks for Small Businesses<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2e1fd607 elementor-widget elementor-widget-text-editor\" data-id=\"2e1fd607\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Payroll tax is administered by state and territory revenue offices, not the ATO. Each state and territory has &#8216;relevant contract&#8217; provisions that can treat contractor payments as taxable wages.<\/p><p>For example:<\/p><ul><li><a href=\"https:\/\/www.revenue.nsw.gov.au\" target=\"blank\" rel=\"nofollow\"><u>Revenue NSW<\/u><\/a><\/li><li><a href=\"https:\/\/www.sro.vic.gov.au\" target=\"blank\" rel=\"nofollow\"><u>State Revenue Office Victoria<\/u><\/a><\/li><li><a href=\"https:\/\/qro.qld.gov.au\" target=\"blank\" rel=\"nofollow\"><u>Queensland Revenue Office<\/u><\/a><\/li><\/ul><p><br \/>Even if a worker is not considered your employee under Fair Work or ATO rules, they may still be treated as a contractor for payroll tax purposes under state legislation.<\/p><p>This is where many small businesses go wrong.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6b65fd91 elementor-widget elementor-widget-heading\" data-id=\"6b65fd91\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What Is a Relevant Contract Under Payroll Tax Rules?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-79be99ff elementor-widget elementor-widget-text-editor\" data-id=\"79be99ff\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Under most state and territory laws, a relevant contract payroll tax issue arises in the following circumstances:<\/p><ul><li>You engage a person to do work for your business.<\/li><li>The contract is mainly for labour.<\/li><li>The contractor does work in or for your business.<\/li><\/ul><p><br \/>When a contract is classified as a relevant contract, payments may be treated as wages for payroll tax purposes. As a result, you may be liable for payroll tax on payments to contractors even if:<\/p><ul><li>They have their own ABN.<\/li><li>They send you invoices.<\/li><li>They claim to be subcontractors.<\/li><\/ul><p><br \/>The label does not matter. The substance of the arrangement does.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-dd13f5d elementor-widget elementor-widget-heading\" data-id=\"dd13f5d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">When Do Payroll Taxes for Independent Contractors Apply?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f7e62ed elementor-widget elementor-widget-text-editor\" data-id=\"f7e62ed\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Payroll taxes for independent contractors arise in situations where the structure appears more like employment than a business service.<\/p><p>Typical indicators:<\/p><ul><li>Labour-only contracts (minimal equipment and materials used)<\/li><li>The contractor is primarily working for your business<\/li><li>Ongoing or rolling contracts<\/li><li>The contractor is integrated into your operations<\/li><li>You control how and when the work is completed<\/li><\/ul><p><br \/>In these cases, state revenue authorities may assess the payments as wages, potentially triggering backdated liabilities.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0030ede elementor-widget elementor-widget-heading\" data-id=\"0030ede\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Payroll Tax vs ATO Rules: Why They\u2019re Different<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5ea4305 elementor-widget elementor-widget-text-editor\" data-id=\"5ea4305\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\tMany business owners confuse taxes for an independent contractor\u00a0under\u00a0<a href=\"https:\/\/www.ato.gov.au\/businesses-and-organisations\/hiring-and-paying-your-workers\" rel =\"nofollow\" target = \"blank\"><u>ATO rules<\/u><\/a>\u00a0with payroll tax obligations set by state revenue offices.\n<table>\n<tbody>\n<tr>\n<td width=\"185\"><strong>Area<\/strong><\/td>\n<td width=\"197\"><strong>Regulator<\/strong><\/td>\n<td width=\"266\"><strong>Focus<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"185\">Income tax &amp; PAYG<\/td>\n<td width=\"197\">ATO<\/td>\n<td width=\"266\">Employment indicators<\/td>\n<\/tr>\n<tr>\n<td width=\"185\">Superannuation<\/td>\n<td width=\"197\">ATO<\/td>\n<td width=\"266\">Common law employee test<\/td>\n<\/tr>\n<tr>\n<td width=\"185\">Payroll tax<\/td>\n<td width=\"197\">State Revenue Offices<\/td>\n<td width=\"266\">Relevant contract rules<\/td>\n<\/tr>\n<tr>\n<td width=\"185\">Worker Classification<\/td>\n<td width=\"197\">Fair Work Ombudsman<\/td>\n<td width=\"266\">Employee vs independent contractor distinction<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\nBeing exempt from the ATO test does not necessarily mean that you are exempt from payroll tax.\n\nAsk yourself:\nAre you assessing contractors under state law, or just under ATO treatment?\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-228457c elementor-widget elementor-widget-heading\" data-id=\"228457c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Contractor for Payroll Tax Purposes: What Businesses Should Check<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9b58ed9 elementor-widget elementor-widget-text-editor\" data-id=\"9b58ed9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>When determining whether payments to a contractor may be treated as wages for payroll tax purposes, state revenue authorities assess the actual working relationship, not just the contract wording.<\/p><p>They typically review factors such as:<\/p><ul><li>whether the contract is mainly for labour<\/li><li>the level of control over how work is performed<\/li><li>whether the contractor works primarily for one business<\/li><li>whether the contractor provides equipment or materials<\/li><li>whether the contractor operates as an independent business<\/li><\/ul><p><br \/>Even when a worker has an ABN and invoices your business, they may still be considered a contractor for payroll tax purposes\u00a0under state legislation.<\/p><p>Understanding these factors early helps businesses identify potential payroll tax exposure before issues arise.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-10d18bc elementor-widget elementor-widget-heading\" data-id=\"10d18bc\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Payroll Tax on Subcontractors: High-Risk Industries<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5dd2100 elementor-widget elementor-widget-text-editor\" data-id=\"5dd2100\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Certain industries are subject to closer scrutiny regarding payroll tax on subcontractors, including:<\/p><ul><li>Construction and trade industries<\/li><li>IT and technology services<\/li><li>Medical and allied health practices<\/li><li>Professional services (legal, accounting, and consulting)<\/li><li>Labour hire businesses<\/li><\/ul><p><br \/>Example:<\/p><p>If a business engages a subcontractor on a full-time basis for 12 months, controls their daily activities, and the subcontractor provides no equipment or materials of their own, the engaging business may be liable for payroll tax on those payments \u2014 even if the subcontractor invoices monthly.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9ae26a0 elementor-widget elementor-widget-heading\" data-id=\"9ae26a0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Payroll Tax Contractor Exemptions: When Do They Apply?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cbf3d8e elementor-widget elementor-widget-text-editor\" data-id=\"cbf3d8e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Exemptions from payroll tax do exist for contractors, but the onus is on you to prove them.<\/p><p>Some common exemptions may apply if the contractor:<\/p><ul><li>Supplies services to the general public<\/li><li>Operates for less than 90 days in a financial year<\/li><li>Employs their own staff<\/li><li>Supplies services that are not normally required by your business<\/li><li>Has more than one principal (i.e. works for multiple clients, not just your business)<\/li><\/ul><p><br \/>Exemptions are not automatic.<\/p><p>For instance, simply having an ABN and a website does not automatically satisfy the &#8216;services to the general public&#8217; exemption.<\/p><p>You need to keep records.<\/p><p>You can find information on contractor exemptions on your state revenue office website \u2014 for example, Revenue NSW contractor provisions, State Revenue Office Victoria, or the Queensland Revenue Office.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2a52ff4 elementor-widget elementor-widget-heading\" data-id=\"2a52ff4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What Happens If You Get It Wrong?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6188b61a elementor-widget elementor-widget-text-editor\" data-id=\"6188b61a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Consequences of not managing payroll tax contractors effectively include:<\/p><ul><li>Audit assessments (sometimes up to 5 years)<\/li><li>Penalties (up to 75% in serious cases)<\/li><li>Interest charges<\/li><li>Reputational risk with clients and stakeholders<\/li><\/ul><p><br \/>A small business may be affected in the following ways:<\/p><ul><li>Unexpected cash flow pressure from backdated liabilities<\/li><li>Erosion of profit margins from penalties and interest<\/li><li>Loss of director and stakeholder confidence<\/li><li>Disruption to business growth and expansion plans<\/li><\/ul><p><br \/>Most businesses underestimate the financial consequences until they receive an audit notice.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8239691 elementor-widget elementor-widget-heading\" data-id=\"8239691\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Practical Checklist: Are Your Contractors at Risk?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9e38287 elementor-widget elementor-widget-text-editor\" data-id=\"9e38287\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Use this quick review:<\/p><h3>Low Risk<\/h3><ul><li>Short-term project<\/li><li>Contractor works for multiple clients<\/li><li>Supplies own equipment<\/li><li>Advertises publicly<\/li><\/ul><h3>Medium Risk<\/h3><ul><li>Ongoing arrangement<\/li><li>Some dependency on your business<\/li><li>Incomplete or informal contract documentation<\/li><\/ul><h3>High Risk<\/h3><ul><li>Labour-only contract<\/li><li>Works mainly for you<\/li><li>Integrated into operations<\/li><li>Long-term engagement<\/li><\/ul><p><br \/>If you are classified as medium or high risk, it is advisable to seek a professional review.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-612c1c1 elementor-widget elementor-widget-heading\" data-id=\"612c1c1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Scalability Risk: Growth Multiplies Exposure<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5119b7c elementor-widget elementor-widget-text-editor\" data-id=\"5119b7c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>As your business expands:<\/p><ul><li>You start hiring more contractors<\/li><li>Different managers independently engage subcontractors<\/li><li>You start operating in other states<\/li><li>Your total wages bill exceeds state payroll tax thresholds<\/li><\/ul><p><br \/>Each state has its own rules around payroll tax thresholds \u2014 and related businesses or entities may be grouped together, which can push you over the threshold sooner than expected.<\/p><p>Businesses operating across multiple states can face unexpected liabilities in each jurisdiction.<\/p><p>Small businesses often overlook the hidden costs of payroll. As explained in our guide to\u00a0<a href=\"https:\/\/befreeltd.com\/au\/resources\/blogs\/payroll-pricing-hidden-costs-guide\/\"><u>hidden costs of payroll pricing<\/u><\/a>, unseen costs and compliance gaps can increase financial risk if left unaddressed.<\/p><p>Are you following a consistent process for contractor onboarding and review?<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1f95b14 elementor-widget elementor-widget-heading\" data-id=\"1f95b14\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Governance Controls Every Small Business Should Implement<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b04d91b elementor-widget elementor-widget-text-editor\" data-id=\"b04d91b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>To manage payroll taxes for independent contractors, consider the following:<\/p><ul><li>Conduct an annual review of all contractor arrangements<\/li><li>Maintain documented records of all exemption decisions and supporting evidence<\/li><li>Keep an up-to-date register of all contractors engaged across the business<\/li><li>Monitor state payroll tax thresholds regularly, especially if operating across multiple states<\/li><li>Reconcile bookkeeping records against payroll tax returns each reporting period<\/li><\/ul><p><br \/>Good records will protect you in case of a state revenue audit. Many growing businesses strengthen their contractor compliance by integrating structured payroll services, ensuring contractor payments, payroll reporting, and state-based tax reviews are aligned and regularly monitored.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0b61bf5 elementor-widget elementor-widget-heading\" data-id=\"0b61bf5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Turning Payroll Risk into Structured Control<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b969b35 elementor-widget elementor-widget-text-editor\" data-id=\"b969b35\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Understanding payroll tax rules for contractors is critical for small and growing businesses. The rules are not the same as ATO definitions and need to be evaluated on a state-by-state basis.<\/p><p>If you are unsure about your contractor payments, waiting for an audit is not a plan.<\/p><p>Befree helps Australian businesses with structured payroll compliance analysis, contractor risk analysis, and scalable finance processes built around state-based compliance requirements.<\/p><p>If you&#8217;re unsure whether your contractor payments could attract payroll tax, don&#8217;t wait for an audit notice, get a professional review today.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-c43314d e-con-full e-flex e-con e-child\" data-id=\"c43314d\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4dd9ede elementor-widget elementor-widget-heading\" data-id=\"4dd9ede\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Quick FAQs<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3b4b036 elementor-widget elementor-widget-n-accordion\" data-id=\"3b4b036\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;n_accordion_animation_duration&quot;:{&quot;unit&quot;:&quot;ms&quot;,&quot;size&quot;:300,&quot;sizes&quot;:[]},&quot;default_state&quot;:&quot;expanded&quot;,&quot;max_items_expended&quot;:&quot;one&quot;}\" data-widget_type=\"nested-accordion.default\">\n\t\t\t\t\t\t\t<div class=\"e-n-accordion\" aria-label=\"Accordion. Open links with Enter or Space, close with Escape, and navigate with Arrow Keys\">\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-6210\" class=\"e-n-accordion-item\" open>\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"1\" tabindex=\"0\" aria-expanded=\"true\" aria-controls=\"e-n-accordion-item-6210\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> Can a contractor be paid through payroll? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-6210\" class=\"elementor-element elementor-element-7ccbb7e e-con-full e-flex e-con e-child\" data-id=\"7ccbb7e\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-35d63e1 elementor-widget elementor-widget-text-editor\" data-id=\"35d63e1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Yes. The payment method does not determine whether payroll tax applies.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-6211\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"2\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-6211\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> What is the 90-day rule? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-6211\" class=\"elementor-element elementor-element-5f7222d e-con-full e-flex e-con e-child\" data-id=\"5f7222d\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-ed4141f elementor-widget elementor-widget-text-editor\" data-id=\"ed4141f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>In some states and territories, contractors working fewer than 90 days per financial year may qualify for exemption.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-6212\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"3\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-6212\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> Are all contractor payments taxable? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-6212\" class=\"elementor-element elementor-element-af32b5c e-con-full e-flex e-con e-child\" data-id=\"af32b5c\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-c52cf20 elementor-widget elementor-widget-text-editor\" data-id=\"c52cf20\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>No. Only payments that meet relevant contract provisions and do not qualify for an exemption are subject to payroll tax.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-6213\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"4\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-6213\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> Does having an ABN exempt a contractor from payroll tax? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-6213\" class=\"elementor-element elementor-element-4850308 e-con-full e-flex e-con e-child\" data-id=\"4850308\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4bccc78 elementor-widget elementor-widget-text-editor\" data-id=\"4bccc78\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>No. The nature of the working relationship determines liability.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<script type=\"application\/ld+json\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@type\":\"FAQPage\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"Can a contractor be paid through payroll?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes. 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However, misinterpreting the rules around payroll tax for contractors can lead to substantial backdated tax liabilities, penalties, and interest. Many small business owners assume that if someone has an ABN and sends invoices, payroll tax does not apply. Unfortunately, that&#8217;s not always the case \u2014 each state and [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":15020,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-15018","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Payroll Tax Contractors Rules for Australian Businesses<\/title>\n<meta name=\"description\" content=\"Confused about payroll tax contractor exemptions? 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