Payroll Tax Exempt for Apprentices and Trainees

Not every employer is aware that Apprentices and Trainees are Payroll Tax Exempt. It is another incentive to assist business owners to embark on training staff and offers real savings.

Apprentices

Wages paid to apprentices are exempt if:

• the apprentice is registered under the VET Act (Vocational Education, Training and Employment Act 2000), and
• they are paid in the course of the apprenticeship.

Wages paid to apprentices are not exempt if:

• they are for periods before or after the apprenticeship
• they are for roles or duties other than those specified in the apprentice contract (where the apprentice has multiple roles or duties)
• the training contract is rejected by the council at any time after it is signed.

Trainees

Wages paid to trainees are exempt if all of the following apply:

• the trainee is registered under the VET Act
• the wages are paid in the employee’s capacity as a trainee
• before the traineeship started, the trainee had not been employed by the employer for
  • 3 months or more (full time)
  • 12 months or more (part time or casual).

Note: The 3- and 12-month time limits only apply if the pre-traineeship employment is for a continuous period. Weekends are not considered to be a break in the continuous period of employment.

Wages paid to trainees doing subsequent training are not exempt. The only exception is if a trainee starts a Certificate III traineeship within 12 months after completing a Certificate II qualification within the same training package or occupational stream.

Wages paid to trainees are not exempt if:

• they are for periods before or after the traineeship
• they are for roles or duties other than those specified in the trainee contract (where the trainee has multiple roles or duties)
• the training contract is rejected by the council at any time after it is signed.

Anti-avoidance provisions apply.


For further information on how we can assist your business with taking advantage of incentives such as this and others, contact us.

0409 879 111