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Alienation of income and “taxable wages”


Payroll tax is a state or territory tax. However, notwithstanding harmonisation, each jurisdiction does not operate from a common Act. States and territories typically tax wages, as defined in each jurisdiction. The definition of “wages” is defined broadly, including wages, remuneration, salary, commission, bonuses or allowances paid to an employee. This article examines common arrangements that are used for income tax purposes and questions if they are effective for payroll tax purposes. The article also looks at the ordinary meaning of “wages” for payroll tax purposes; what deeming provisions may apply to tax wages that may not otherwise be captured under the ordinary meaning of wages; and the treatment that may be afforded to payments in relation to directors, payments for image rights and distributions of profits in trusts, partnerships and incorporated entities.

Author profiles

Paul Hockridge CTA
Photo of author, Paul HOCKRIDGE Paul is Tax Advisory Partner at Mutual Trust, Australia’s leading multi-family office. He has worked for the ATO, a large law firm, has been a partner in medium and Big 4 chartered accounting firms and has over 30 years' experience in tax, asset protection, estate and succession planning. Paul’s niches include litigation support, property development and FBT and salary packaging. Paul specialises in advising high wealth families and closely held businesses, as well as providing support for a number of accounting and law firms. Paul maintains a practicing certificate as a legal practitioner in Victoria, is a fellow of both CPA Australia and Chartered Accountants Australian and New Zealand, is senior fellow and teaches in the Masters program in the Law School at the University of Melbourne and is a chartered tax adviser. He sits on The Tax Institute’s FBT and Employment Taxes Committee and contributes to The Tax Institute’s book, Estate and Business Succession Planning. Perhaps Paul is best known as a regular presenter at local, State and National Tax Institute conferences. - Current at 04 December 2019
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Alec Pettigrew
Alec heads the Office of State Revenue Queensland’s Administrative Review Branch, managing the Commissioner’s objection, appeal and private ruling functions. Before joining the public service, Alec worked for more than 10 years as a solicitor in private practice with a focus in the fields of commercial and property law. Drawing on his experience as an adviser, self-assessor and ta administrator, Alec offers valuable insights into the revenue office/client relationship. - Current at 26 June 2019
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