188.8.131.52 Taxation & superannuation
Taxation & superannuation guarantee for businesses
Costs of providing PLP (e.g. the deductible component of software expenses) are deductible expenses necessarily incurred by the employer in carrying on a business.
PLP has no goods and services tax or capital gains tax implications.
Employers are not required to pay payroll tax in respect of instalments of PLP paid to an employee.
Employers are not required to make superannuation guarantee contributions in respect of PLP.
PLP provided by employers
Where the employer provides PLP, the employer is required to withhold PAYG amounts at the appropriate rate for the employee, consistent with their withholding obligations for other pay and allowances paid to the employee.
Employees are able to salary sacrifice PLP where their employer offers such an arrangement and the PLP is provided by the employer.
PLP provided by Centrelink
Where the PLP is provided by Centrelink, Centrelink will withhold tax either at the default rate of 15% or at another rate nominated by the recipient.
Employees are not able to salary sacrifice PLP provided by Centrelink.
Dad & partner pay
Centrelink will withhold tax either at the default rate of 15% or at another rate nominated by the recipient.
Note: The amount of tax a recipient must pay depends on their taxable income (see the definition of taxable income in the SSAct subsection 23(1)) for the financial year. A recipient's expected or possible taxation arrangements is solely a matter between the person and the ATO. Any enquiries regarding either the ATO's requirements or tax assessments should be discussed directly with the ATO.
Act reference: PPLAct section 68 Deductions for PAYG withholding (PLP), section 115EH Deductions for PAYG withholding (DAPP)
Taxation Administration Act 1953 Schedule 1 section 12-110 Social security or other benefit payment, Schedule 1 section 16-155 Annual payment summary, Schedule 1 section 16-160 Part-year payment summary, Schedule 1 section 18-65 Refund of withheld amounts by the payer to the recipient, Schedule 1 section 18-70 Refund of withheld amounts by the Commissioner to the recipient, Schedule 1 section 355-65 Exception-disclosure for other government purposes
Policy reference: PPL Guide 5.2.2 When DAPP is paid