Businesses may be grouped together and effectively treated as a single entity for payroll tax purposes.
A payroll tax group exists where:
  • Corporations are related bodies corporate within the meaning of s50 of the Corporations Act 2001 (commonly known as a holding and subsidiary relationship).
  • Employees are shared between businesses.
  • The same person or the same persons together have a controlling interest in at least two businesses.
  • An entity has a controlling interest in a corporation.
A company includes all bodies and associations (corporate and unincorporated) and partnerships.
A corporation has the same meaning as in s9 of the Corporations Act 2001 (Cth).
Effect of the grouping provisions
The grouping provisions have the effect of deeming businesses to be related and including these businesses in a group. The wages of these related businesses are then added together, with only one member of the group entitled to claim the threshold amount.
Therefore, in most cases, although each member of the group must register for payroll tax and lodge a separate return, the businesses constituting the group are effectively treated as one entity and their payroll tax liability is calculated on the group’s total wages.
All members of the group, irrespective of whether they are employers, become jointly and severally liable for the debts of the group that are incurred while they are group members. This means that if one member defaults in paying tax, that amount may be recovered from any of the other group members.