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NT payroll tax exemption for hiring resident employees

NT payroll tax exemption for hiring resident employees

Andrew Hosken discusses the new NT payroll tax exemption for hiring resident employees.

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Senior Manager, Employment Tax Advisory

KPMG Australia

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An exemption from payroll tax (Commisioner's guidleine (PDF 230KB)) was introduced in the 2018-19 Northern Territory (NT) budget for wages paid by employers in NT from 1 May 2018. The exemption applies to:

  • an NT resident who, when employed, increases the total number of NT residents employed in the business; or
  • existing employees who relocate to NT as their principal place of residence and increase the number of NT residents employed in the business; or
  • an NT resident who is hired in the NT to replace a former employee who was employed outside NT and increases the number of NT residents employed in the business.

To be eligible for the exemption employers must increase the number of NT residents employed above their ‘baseline count’. The ‘baseline count’ is the number of NT residents employed full or part time, or engaged under a relevant contract, on 30 April 2018. The ‘baseline count’ does not include casual employees or employees who work in the NT but have their principal place of residence outside the NT.

The exemption applies to the wages paid to those NT residents that are in excess of the baseline count and applies for up to two years.

To ensure access to the exemption, Territory Revenue Office is asking employers in the NT to confirm their baseline count on their April 2018 payroll tax return. This should be done within the Northern Territory Revenue Office ‘INTRA’ system by 31 May 2018.

If the April 2018 payroll tax return has been submitted without confirming the ‘baseline count’ employers can amend the return by accessing INTRA and entering the ‘baseline count’ in the box on that payroll tax return labelled ‘Number of resident employees’. Amendments to the April 2018 return confirming the ‘baseline count’ MUST be finalised by 31 May 2018.

On an on-going basis, employers in the NT will advise the number of NT resident employees they have on each monthly payroll tax return and provide details of the exempt wages paid in the field marked ‘Other exempt wages.

It is imperative that NT employers are able to substantiate the ‘baseline count’ and also the circumstances of any increase to that number.

© 2018 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.

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