A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.
Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.
|Y =||The estimated remuneration for 90 days of service|
|A =||The highest hourly rate for the classification in that industry according to the respective pay scale summary that is available on the Australian Government’s Fair Work Ombudsman website|
|B =||Average number of hours worked per working day|
|C =||120 per cent (this accounts for an additional 20 per cent for the types of payment not typically received by contractors such as sick pay, holiday pay, overtime)|
|D =||90 days|
In October 2010, New Homes Pty Ltd (New Homes) engaged a plasterer to perform a contract for services under which an amount of $15,000 (exclusive of GST) was paid, which included the supply of various materials needed for the job. The plasterer worked for New Homes at residential home sites for an average of seven hours per day.
New Homes finds it difficult to determine the actual number of days the plasterer worked during the 2010–11 financial year. New Homes decides to adopt the highest hourly rate for the classification based on the pay scale summary set out in the award that best matches the work undertaken by a plasterer. According to the Fairwork Australia website, the pay scale that best matches the work undertaken by a plasterer who performs work in the onsite building industry is the Building and Construction General On-site Award 2010 (the Award).
Labour-only component of contract price
The actual labour-only component after subtracting 20 per cent (deduction allowable for wall and ceiling plasterers according to Public Ruling PTA018) is calculated as follows:
$15,000 minus $3,000 (being 20 per cent of $15,000) = $12,000
The highest hourly rate for a full-time employee plasterer under the Award is $18.06.
As a result, the estimated remuneration for 90 days of service provided by the plasterer under the contract is calculated to be:
$18.06 × 7 × 120% × 90 days = $13,653.36
In this instance, the labour-only component ($12,000) paid to the plasterer is less than the estimated remuneration ($13,653.36) calculated using the formula. Therefore, the 90-day exemption applies to exempt that payment from payroll tax.
Commissioner of State Revenue
Date of issue: 18 October 2012
|Public Ruling||Issued||Dates of effect|
|PTA035.1||18 October 2012||1 July 2008||Current|