Exempt wages for payroll tax
Learn which wages you don’t need to pay payroll tax on.
Certain wages are exempt from payroll tax in Queensland, including:
- wages paid to apprentices and trainees
- wages paid to general practitioners
- wages paid to employers with special exemptions
- wages paid to employees with special exemptions
- JobKeeper payments.
Wages that are exempt from payroll tax are also exempt from the mental health levy.
Apprentices and trainees
Wages you pay to apprentices and trainees may be exempt from payroll tax.
To be regarded as an apprentice or trainee for payroll tax purposes, the employee must sign a training contract with their employer to undertake an apprenticeship or traineeship declared under the Further Education and Training Act 2014.
If your apprentice and trainee wages are exempt, you can also claim a payroll tax rebate when lodging your returns.
Apprentices
An apprentice is a person who is trained in a skilled trade and will, on completing training, become a qualified tradesperson (e.g. electrician, plumber, cabinet-maker, auto mechanic).
Exempt wages
Wages paid to apprentices are exempt if:
- the apprenticeship contract has been signed by the employer and apprentice, and the contract registered under the Further Education and Training Act
- and
- the wages are paid in the course of the apprenticeship.
Non-exempt wages
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).
Peter is employed by Goodbake Pty Ltd as an apprentice pastry chef. To make some extra money, he works in the Goodbake store as a retail assistant every second weekend. Because working in the shopfront does not form part of his normal apprenticeship duties, any wages paid to Peter while working in this role are not exempt.
Trainees
A trainee is a person trained in a vocational area (e.g. office administration, information technology, hospitality) and will, on completing their traineeship, receive a qualification in their chosen vocational area.
Exempt wages
Wages paid to trainees are exempt if all the following apply:
- the traineeship contract has been signed by the employer and the trainee, and the contract registered under the Further Education and Training 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).
The 3-month 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 further training outside the scope of the traineeship are not exempt. The only exception is if a trainee starts a Certificate III traineeship within 12 months after completing a Certificate II qualification as part of the same training package.
Non-exempt wages
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).
Donna is employed by InfoTech Pty Ltd as a trainee technical support officer. During peak periods, Donna works overtime in InfoTech’s office, handling general reception and filing duties. Because these duties do not form part of her IT traineeship, any wages paid to Donna while working in this role are not exempt.
General practitioners
From 1 December 2024, wages paid by a medical practice (other than a hospital) to a contracted or employee general practitioner (GP) are exempt under an administrative arrangement. See the public ruling on the exemption (PTAQ014.1).
For the purposes of payroll tax, a GP includes doctors who are one of the following:
- registered in the speciality of general practice
- on accredited general practice pathways
- certain prescribed medical practitioners.
Public ruling PTAQ014.1 contains full definitions of ‘medical practice’ and ‘general practitioner’.
Employers with special exemptions
Wages paid by the following employers may be exempt in certain circumstances:
- governor of a state
- public hospital
- charitable institution
- teachers training college
- Queensland Government department (excluding commercialised business units)
- Queensland hospital and health service
- local government to the extent that they are not for or in connection with the list of prescribed activities listed in section 14(2) of the Payroll Tax Act 1971
- Commonwealth War Graves Commission
- Australian-American Educational Foundation
- a consular or other non-Australian government representative.
Employees with special exemptions
Wages paid to the following employees may also be exempt:
- member of the Australian Defence Force
- volunteer member of a rural fire brigade
- volunteer member of the State Emergency Service
- honorary ambulance officer
- Aboriginal or Torres Strait Islander person employed under the Community Development Employment Projects program (now administered under the Community Development Program).
JobKeeper payments
JobKeeper payments are exempt from Queensland payroll tax. When calculating your threshold amount, you do not include the JobKeeper amounts.
Also consider…
- Learn about apprenticeships and traineeships.
- Find out about exemptions for contractors.
- Read more about exemptions in section 14 of the Payroll Tax Act 1971.
- Find out about the exemption for employment agents.