Subsuming and payroll tax grouping
Businesses may be grouped for payroll tax when smaller groups are subsumed into one larger group. View examples of subsuming.
For payroll tax purposes, businesses can be grouped with other businesses if there is a link between the businesses. This can include non-employing businesses.
Grouping can occur regardless of where a business operates in New South Wales (NSW) or interstate.
When businesses are grouped only one member of the group can claim the tax-free annual threshold. Read the thresholds and rates page for more details.
What is subsuming?
Subsuming is a type of payroll tax grouping.
Subsuming is where related businesses or groups of business are combined into an aggregate group. See section 74 of the Payroll Tax Act 2007 (PTA).
Businesses can be grouped by subsuming in two ways.
Subsuming of groups with a common member
Where two or more groups have at least one member which is common to each, those groups are subsumed or amalgamated into a larger group. See section 74(1) of the PTA.
Subsuming due to a combined interest
Where two or more members of a group together have a controlling interest in another business, such as through a common control grouping, then all those members are subsumed into a larger group. See section 74(2) of the PTA.
Examples
Stationery Pty Ltd is the holding company for both Pencils Pty Ltd and Erasers Pty Ltd (Group 1).
The directors of Art Supplies Pty Ltd are also the directors of Pencils Pty Ltd (Group 2).
The shareholders of Acrylic Paints Pty Ltd are also the shareholders of Art Supplies Pty Ltd (Group 3).
Pencils Pty Ltd is common to Groups 1 and 2.
Art Supplies Pty Ltd is common to Groups 2 and 3.
As a result, all 5 businesses, Stationery Pty Ltd, Pencils Pty Ltd, Erasers Pty Ltd, Art Supplies Pty Ltd and Acrylic Paints Pty Ltd, are subsumed into 1 large group.
Diagram 1
This diagram is a visual depiction of the relationships in the example.
Grains Pty Ltd and Harvest Pty Ltd have common shareholders and are grouped for payroll tax purposes under section 72 of the PTA.
Grains Pty Ltd and Harvest Pty Ltd each hold 33% of the units in the Golden Fields Unit Trust.
This means that together as a group, Grains Pty Ltd and Harvest Pty Ltd have a controlling interest in the Golden Fields Unit Trust under section 72.
As a result, Grains Pty Ltd, Harvest Pty Ltd and the Golden Fields Unit Trust form a single group for payroll tax purposes under section 74(2) of the PTA.
Diagram 1
This diagram is a visual depiction of the relationships in the example.
Related information
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