Each of the Australian states have announced that they propose to harmonise the nexus rules for attributing payroll tax liability in respect of workers who perform activities in more than one state.
Under the new rules, payroll tax will become payable in the state where the worker resides rather than the state in which the worker is paid.
These new rules will be introduced through the legislation in each state over the coming months but will have retrospective effect back to 1 July 2009. Until these rules are legislated, there is no requirement to alter the way in which payroll tax is paid. However, it is expected that employers who are affected by these changes will be required to make a balancing adjustment in their annual reconciliation process for the 2010 year.
These new rules will particularly impact employers in the airline industry and in the transport industry more generally.
The changes will have no impact on the imposition of payroll tax in respect of workers who work solely in one state during any payroll tax reporting period.
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