Some employers may be grouped together for payroll tax purposes. Grouping provisions apply throughout Australia and aim to prevent taxpayers from using a number of businesses to reduce their payroll tax liability or avoid their payroll tax obligations altogether.
Under the grouping provisions, two or more employers may constitute a group if:
- they are related bodies corporate within the meaning of the Corporations Act 2001 (this is commonly known as a holding and subsidiary relationship)
- they use the same employees
- the same people have controlling interests in a number of businesses
- one employer has a controlling interest in another (being a corporation)
If an employer is a member of two or more groups, all the members of those groups constitute one group.
Employers who make up a group must provide the details of employers within their group at the Online Payroll Tax Registration. You must also notify the ACT Revenue Office in writing if the group details change during the year.
Designated Group Employers
ACT employers that are members of a business group may nominate a Designated Group Employer (DGE). Only the DGE can claim the ACT payroll tax-free threshold amount. If the DGE wishes to do so in any monthly return or annual reconciliation return, it must provide both its ACT wages and the group's entire Australia-wide wages (including wages paid in the ACT). A business group may nominate a DGE if:
- the group member being nominated as the DGE has paid (or is likely to have paid) Australia-wide wages exceeding $2,000,000 during the financial year
- no individual member of the group has paid (or is likely to have paid) Australia-wide wages exceeding $2,000,000, but the sum of the Australia-wide wages paid by all group members exceeds $2,000,000.
If an employer is a member of a group and is not the DGE, it cannot claim any tax-free threshold entitlement. In this case, the payroll tax is calculated at the flat rate of 6.85% of its ACT wages.
To nominate an ACT group member as the DGE or joint return lodger, complete the application form.