Employer warning regarding labour hire payroll processors
Department of Treasury and Finance > Taxes, Royalties and Grants > TRO News > Posts > Employer warning regarding labour hire payroll processors
January 11
Employer warning regarding labour hire payroll processors

Have you recently contracted your payroll processing function to another company who pays your employee wages, benefits, PAYG, superannuation and payroll tax on your behalf?

Recent audits have identified that some payroll processors (particularly those using ‘labour hire’ contracts) are not passing on payroll taxes to relevant state revenue offices despite receiving payments from the employer.

It is strongly recommended that you conduct appropriate due diligence before engaging a payroll processor to perform these services.

If you have a payroll processor:

1. Ask for proof that they have passed on payroll tax to the Territory Revenue Office.

2. If you are unsure that payment has been made, contact us on 1300 305 353. Contact details for other State and Territory Revenue Offices are available at www.payrolltax.gov.au.

In the cases seen to date, the labour hire contract is not a genuine labour hire agreement, which means employers have to pay further amounts to meet their outstanding tax liabilities, while trying to recover the payment already made to the payroll processor.

Notify the Territory Revenue Office if you have been approached recently by labour hire payroll processors offering to help your business as your information could save others from the scam.