Record keeping for contractor payroll tax exemptions

If you claim one of the 9 exemptions on payments to contractors, you must keep accurate records to substantiate your eligibility.

We may request these records for a payroll tax review or investigation, so they must be:

• legible
• accessible
• retained at the time the exemption is claimed
• kept for at least 5 years unless we advise otherwise.

Examples of records and evidence include:

• contract or sub-contractor agreements
• scope of works documentation (e.g. work or purchase order)
• tax invoices from the contractor that demonstrate the exemption claimed
• accounting records of payments made to a contractor
• general ledger summaries
• contractor payment summary
• timesheets
• details of the contractors you engage, including their ABN, contact details, business website address and any other published advertising material
• attendance records for the days on which contractors attended your business premises or work site
• WorkCover Queensland (or interjurisdictional-equivalent) policy records.

Also consider…

• Understand the difference between contractors and employees.
• Find out about deductions on contractor payments.
• Use the interactive help to see if a contractor exemption applies.
• Read about relevant contracts.
• Learn about record keeping for payroll tax.