4. Services required for 180 days or
less in a financial year

This exemption applies when an employer engages a contractor to provide services of a kind that is ordinarily required by the employer for less than 180 days in a financial year.

This exemption focuses on:

• the kind of service the contractor provides, and
• how long the employer's business ordinarily requires that kind of service.

See section 32(2)(b)(ii) of the Payroll Tax Act 2007 (PTA).

This is different to the 90-day exemption, which focuses on the contractor and the number of days they provide their services.

The 180-day exemption does not extend the 90-day exemption.

For more details:

• Revenue Ruling PTA 020 – Contractors: 180-day exemption explains the 180-day exemption under section 32(2)(b)(ii) of the PTA and provides examples to clarify the application of this exemption.
• Revenue Ruling PTA 014 – What constitutes a day’s work clarifies what constitutes a day’s work for the purposes of sections 32(2)(b)(ii) and 32(2)(b)(iii) of the PTA.

Examples

Exemption applies

A ski resort engages contractors to provide skiing lessons for their customers for 120 days during peak ski seasons.

This exemption applies because the ski resort ordinarily requires ski instructor services for less than 180 days in the financial year.

Exemption does not apply

A building business employs a full-time accountant to maintain its accounting records.

The business also engages an independent accounting contractor for 3 days per week.

This exemption does not apply because the building company requires accounting services throughout the year.