Payroll tax guide – Contractor exemptions
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  1. Payroll tax guide – Contractor exemptions
  2. Services ancillary to the supply
    of goods
  3. Services not ordinarily required
    by your business
  4. Services required for 180 days or
    less in a financial year
  5. Services provided for 90 days or
    less in a financial year
  6. Services provided by a contractor
    to the public during the financial year
  7. Services performed by 2 or
    more people
  8. Services for the conveyance of goods provided by an owner driver

6. Services provided by a contractor
to the public during the financial year

This exemption applies when the Chief Commissioner is satisfied that the contractor has:

  • provided their services in the course of conducting a business, and
  • ordinarily provided services of that kind to the public during the relevant financial year.

The contractor must provide services to the public. Simply being available to provide them is not sufficient.

You can claim this exemption without applying to the Chief Commissioner if the:

  • contractor provided services of that kind to two or more businesses (not being members of a group) during the financial year, and
  • employer is claiming the exemption for an average of 10 days or less per month (excluding the months in which no services were provided).

If the 2 criteria above are not met, you can still contact us to request the exemption. We will consider a range of factors including:

  • the clients serviced by the contractor
  • how long the contractor spent with clients
  • the extent and nature of the contractor's advertising
  • the nature of the contractor's business, and/or
  • the kind of services provided.

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

For more details:

Examples

Exemption applies

A building company engages a plumbing contractor to carry out regular work during the financial year.

The plumbing contractor is:

  • free to accept other work
  • advertises its business on the internet and social media, and
  • performs plumbing work for other unrelated businesses.

This exemption applies.

Exemption does not apply

A building company engages a plumbing contractor to carry out plumbing work.

The plumbing contractor also undertakes plumbing jobs for other businesses, but all the businesses are part of the same group for payroll tax purposes.

The contract is not exempt under this provision because the contractor does not provide services to the public generally.