Can you please advise what the tax impact will be for the following scenario for a PAYG contractor paid under the Tax Type – Labour Hire. The specific details are as follows:
- PAYG contractors being paid by a recruitment company.
- Tax Type – Labour Hire
- Pre-Tax deductions have been deducted during the year such as Salary Sacrifice Super & Novated Leases
- Contractor’s income has been classified as Personal Services Income (PSI)
If the contractor’s YTD Gross is $100k and $15K was deducted for Salary Sacrifice:
- Will his YTD Gross show as $100k or $85K when he lodges his tax return?
- In the event it is $100k, will the contractor be liable for income tax on the $15k (Salary Sacrifice pre-tax deduction)?
- As part of the tax return submission can a Tax Deduction be claimed for the Salary Sacrifice?
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289 views
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