Wages Underpayment, Payroll Tax Implications

The current exposure of many cases of wages underpayment sends a strong message to all Australian businesses, small and large. Businesses must be on high alert. Whether intentionally or accidentally, if you are underpaying your staff, there is an increasing chance that you will get caught. The results can be devastating and not just financial but also reputational.

And of course, there are also all sorts of repercussions including payroll tax.

If you have been underpaying wages then you have also been underpaying payroll tax. This can often result in severe penalties and not much sympathy from the Office of State Revenue (OSR).

My advice to business is to conduct a thorough audit of your wages and staff payments systems.

Businesses that are particularly at risk appear to be in retail and hospitality.

If you discover underpayment then you also need to come clean to the OSR.  Penalties for lodging false returns are substantial but the OSR is generally more lenient on companies that come clean and contact them.

Your total wages bill may have been under the payroll tax threshold for your state. After correcting any underpayments, you may find that you are over the threshold and therefore payroll tax is payable. And the OSR can apply this retrospectively.

Fortunately, Tobin Partners has plenty of experience in negotiating with the OSR so please contact us at Tobin Partners Lawyers by email or call Peter Tobin 0438 001 809 directly for a confidential discussion about any additional liability for payroll tax.