To determine the value of these wages, you must consider the following points.
Payroll tax shortcuts
Useful links
- Payroll Tax Act 1971
- Apprenticeships—Queensland
- Community Development and Employment Project
- Vocational Education, Training and Employment Act 2000
- Workers’ Compensation and Rehabilitation Act 2003
- Income Tax Assessment Act 1936
- NSW Office of State Revenue
- Vic. State Revenue Office
- WA Office of State Revenue
- RevenueSA
- Tas. State Revenue Office
- ACT Revenue Office
- NT Revenue Office
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Shares or options are taxable when they are granted to:
- employees
- contractors
- company directors (past, present or future).
When is the relevant day?
You must declare the value of any shares and options in your payroll tax return for the period in which the 'relevant day' falls. The 'relevant day' is the day a share or option is granted to a person or the day they vest in a person.
You can usually choose either the grant date or the vesting date as the relevant day to declare the value of a share or option. However, the 'relevant day' is automatically chosen in the following situations.
| Relevant day | Situation | When share/option should be declared |
|---|---|---|
| Grant date |
|
Return period that includes grant date |
| Vesting date |
|
Return period that includes vesting date |
| 7 years after grant date |
|
Return period that includes date that is 7 years after the share or option was granted |
When do shares & options vest?
| Shares | Options |
|---|---|
|
A share vests on the day when:
|
An option vests on the day when one of the following conditions is met, whichever happens first:
|
Note: Shares and options may constitute a fringe benefit under the Fringe Benefits Assessment Act 1986 (Cwlth) if they are not defined under an ATO-approved employee share scheme. In that case, the value of these shares and options should be included as taxable wages under the fringe benefits provisions.
Are the wages taxable in Qld?
The nexus provisions generally indicate in which Australian jurisdiction (state or territory) payroll tax is to be paid.
However, where the employee and employer are not based in an Australian jurisdiction during the return period that applies to the relevant day, the shares or options are taken to be Queensland taxable wages if the share or the option to acquire the share is in a Queensland-registered company.
Example
An employee lives and works overseas normally but was on temporary assignment in Australia during the month of June.
While on assignment, the employee performed services in New South Wales and Victoria. During this time the employee was granted shares in a Queensland company. The relevant day for this transaction was 15 June.
The shares are taxable in Queensland because the company is registered in Queensland, even though the employee usually lives overseas and was paid wages by a company outside an Australian jurisdiction in the month containing the relevant day.
What is the Qld taxable value?
The value of taxable wages consisting of a share or option is the value of the shares or options on the relevant day, less any contribution the employee pays that is not in relation to services performed.
The value of a share or option is:
- the amount worked out under sections 83A–315 of the Income Tax Assessment Act 1997 (Cwlth), if applicable
otherwise
- the market value of the share or option.
Withdrawn shares & options
You may get a refund if a share or option you granted is:
- withdrawn or cancelled because a condition is breached
- exchanged for something that is not a share or option.
If you paid tax on withdrawn shares or options, your wages in the financial year or final period in which they were withdrawn will be adjusted by the value of the withdrawn shares or options.
Shares or options that are forfeited or lapse are valued as nil at the 7-year vesting date because the share or option does not exist at the time.
You cannot get a refund if the share or option expires just because the employee fails to exercise the rights attached to it.