Australia – Tax Authorities Increase Payroll Tax Reviews of Businesses

Australia – Tax Authorities Increase Payroll Tax ...

Revenue Offices in Australia are undertaking more frequent payroll tax reviews to ensure compliance, particularly in relation to refund requests.

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Flash Alert 2014-014

Revenue Offices across all jurisdictions in Australia are undertaking more frequent payroll tax reviews to ensure compliance.  The KPMG International member firm in Australia has noticed an increase in reviews – particularly in relation to refund requests. 


Proper payroll reporting for cross-border employees can be particularly challenging, especially if reportable amounts are paid abroad. With enhanced scrutiny of payroll tax matters by State Revenue Offices, proper payroll processes and tax compliance take on even more urgency as non-compliance can result in costly penalties and interest. Further, as a result of the intensifying focus on payroll tax audits, the ability to make a voluntary disclosure before an audit commences is becoming more difficult.

Identification of unregistered businesses has resulted in significant 'wins' for Revenue Offices across Australia. State Revenue Offices are now working closely together to identify non-compliance activities across jurisdictions. There is anecdotal evidence that audits in one state are often followed by audits in another state in which an entity operates. Additionally, some states may conduct audits of common employers on behalf of other states.

A main focus area of Revenue Office-initiated audits is the declaration of fringe benefits provided to employees. In many instances Revenue Offices have identified employers not declaring or under-declaring fringe benefits. Revenue Offices are also focusing on employee share schemes, grouping provisions, and contractor arrangements.

The state of Victoria is offering a short term concession until 31 March 2014, in respect of interest on underpaid tax and shortened review periods, where employers attend scheduled education sessions and make voluntary disclosures. Various other conditions apply.


Being aware of wage base inclusions and exclusions is important in helping ensure all ‘remuneration’ is included in payroll tax returns (both monthly and annually).

Employers should take appropriate steps to be prepared for an audit by undertaking a review of their current payroll tax processes and procedures, and if required, consider making a voluntary disclosure in order to reduce potential penalties and interest charges.

The information contained in this newsletter was submitted by the KPMG International member firm in Australia.

© 2016 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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