As the owner of a recruitment and staffing business in Australia, understanding when to group companies for payroll tax is critical to ensuring compliance with the law.
This is particularly important as payroll tax is a state-based tax, and each state has its own set of rules and regulations. In Australia, most payroll taxes are based on the total wages paid by the employer over a given period. Depending on the size of your business, the amount of wages paid and the number of employees, you may be required to group companies for payroll tax.
When grouping companies for payroll tax, the key consideration is whether the companies have sufficient common control. This means that a business must have the majority of its directors in common across each company or the majority of shareholders. The firm must meet these criteria to group companies for payroll tax.
It is important to note that while most directors or shareholders must be common across the companies, they do not necessarily need to be the same people. The commonality is measured by the percentage of control across the companies.
By understanding when you need to group companies for payroll tax in Australia, you can reduce the risk of facing penalties or other consequences for non-compliance. If you are still determining whether your business needs to group companies for payroll tax, please contact Pay Australia today.
