1.2.2.30 Taxation & superannuation

Taxation & superannuation guarantee for businesses

PPL funding amounts are assessable income for employers and the employer is entitled to a tax deduction when amounts of PLP are paid to employees.

Costs of providing PLP (for example, 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.

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.