Warning for employers

Warning to employers regarding payroll processors offering labour hire arrangements

Many employers use payroll processors, whose function it is to pay employee wages, benefits, PAYG, superannuation and payroll tax on behalf of the employer.

Recent audits have identified that some payroll processors, particularly those offering to assume the status of employer for all employees through “labour hire” arrangements, are not passing on payroll taxes to relevant state revenue offices despite receiving payments from the employer.

To safeguard themselves, employers are strongly encouraged to conduct appropriate due diligence before engaging a payroll processor.  In addition, for those employers that have a payroll processor, you are strongly encouraged to:

  1. Ask for proof that the payroll processor has passed on payroll taxes to relevant state revenue offices; or
  2. Contact RevenueSA on 8204 9880 (or other relevant state revenue offices) if you wish to confirm that the payroll processor has passed on payroll taxes.

Recent audits have also identified that some “labour hire” contracts involving payroll processors are not genuine, meaning that employers have to pay further amounts to meet their outstanding payroll tax liabilities and are left trying to recover payroll tax payments made in good faith to the payroll processor.

Please notify RevenueSA if you have been approached by payroll processors offering such labour hire arrangements that you suspect may not be genuine.