Do Apprentice or Trainee Wages Count for Payroll Tax?
- johnry8
- Sep 11
- 2 min read
Payroll tax is a major cost consideration for many businesses in Australia, particularly as they grow and take on more staff. One common question business owners ask is whether apprentice or trainee wages are included in payroll tax calculations.
Apprentices and Trainees: Are They Exempt?
In most Australian states and territories, wages paid to apprentices and eligible trainees are exempt from payroll tax, provided they meet the government’s approved training program requirements.
The exemption is designed to encourage businesses to take on apprentices and trainees, supporting skills development across industries.
However, the exact rules and definitions vary by state, so it’s essential to check your local revenue office guidelines.
Key Conditions for Exemption
To qualify for payroll tax exemption on apprentice or trainee wages, businesses generally need to ensure:
Registered Training Contract -The apprentice or trainee must have a formal training agreement registered with the relevant state training authority.
Approved Course -The training program must be recognised under vocational education and training (VET) guidelines.
Compliance with State Rules - Each state has slightly different conditions. For example, some jurisdictions require annual reconciliations or evidence of training to maintain the exemption.
Common Mistakes Businesses Make
Assuming all trainees are exempt - Remember not all training arrangements qualify. Only approved programs are counted.
Failing to keep proper documentation – Without contracts and evidence, exemptions can be denied during audits.
Overlooking changes in state legislation – Rules can differ or be updated yearly.
Best Practices to Stay Compliant
Verify eligibility early: Confirm that your apprentice or trainee program is approved before claiming exemptions.
Maintain detailed records: Keep copies of training contracts, pay slips, and course documentation.
Check state-specific guidelines: Review payroll tax rulings in your state regularly.
Seek professional advice: A tax specialist can help you claim correctly and avoid penalties.
Still unsure whether your apprentice or trainee wages should be included in your payroll tax calculations?