tax‑free threshold is reduced where wages are also paid interstate. The available threshold is calculated based on the proportion of NSW wages compared with total Australian wages. This means that workforce movement can change more than just where you are registered. It can change how much threshold you are entitled to claim, and how much tax is payable in states where you were already compliant. I have seen this play out where a business was correctly registered in one state, but changes in workforce location across other states diluted the threshold available there. The reporting continued based on historical assumptions, while the underlying wage profile had shifted. Grouping can add another layer to this. Where entities are grouped, their wages are aggregated, and only one threshold is available across the group. The presence of employees in different states across different entities can therefore change the position for the entire group, not just for the entity employing them. These issues are not usually caused by a lack of awareness of payroll tax itself. They are more often a result of information sitting in different
parts of the business. HR holds employee location data. Payroll processes the wages. Finance and tax manage the registrations and reporting. Unless those views are brought together, the payroll tax position can continue to reflect how the business operated a few years ago, rather than how the workforce looks today. What This Needs to Look Like Addressing this does not require a complex redesign of systems, but it does require a clear view of the workforce as it actually exists. In practice, that means mapping where employees are performing their work across states and territories, not relying on employment contracts, office locations, or where employees were originally hired. It also means recognising that these positions are not static. Employee locations For employers operating across more than one jurisdiction, thresholds do not apply independently to each state in the way they often expect.
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ISSUE 25 GLOBAL PAYROLL MAGAZINE
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