Tax Bites

NSW payroll tax and financial planners

21st October 2014

  • There seems to be a lot of NSW payroll tax activity of late.  One area of risk seems to be financial planning firms that engage financial planning commission agents (as common law contractors rather than common law employees).
  • Previously the Office of State Revenue treated those commission agents as excluded from the contractor provisions for payroll tax purposes under the exemption for insurance sellers – this was a concession.
  • But that changed on 1 July 2007 with the harmonisation of payroll tax legislation between NSW and Victoria.
  • From that time the concession was withdrawn and the commission agents could be treated as employees under the contractor provisions.
  • The main exemption that financial planning firms might then seek to apply in relation to their commission agents is the exemption for additional labour (although this may not apply in many cases).
  • It’s worth thinking about for your financial planning firm clients given the consequences of additional payroll tax liabilities being identified in an audit.
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About Tax Bites

Tax Bites are general in nature and are not a substitute for specific advice. They are the opinion of Tax Advisory Specialists, and the ATO or the Courts may take a different view. They are not updated for changes in the law or the interpretation of the law since publication.


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