No-Go to item P14.
Yes-Read on.
What you need to know
Salaries and wages and other labour costs actually paid or payable to persons employed in your business-excluding those forming part of capital expenditure or paid for private domestic assistance-usually are deductible. However, you cannot be an employee of your business. Payments to you of salaries-in reality an allocation of profits-are not allowable deductions in calculating your income or loss.
Include any salary and wage component of Cost of sales such as allowances, bonuses, casual labour, retainers and commissions paid to people who received a retainer, and workers compensation paid through the payroll. Also include direct and indirect labour, holiday pay, locums, long service leave, lump sum payments, other employee benefits, overtime, payments under an incentive or profit sharing scheme, retiring allowances and sick pay. Include any salary or wages paid to related entities both here and at H item P14 on your schedule. Exclude agency fees, contract payments, sub-contract payments, service fees, superannuation, reimbursements or allowances for travel, wages or salaries reimbursed under a government program, management and consultant fees.
Step 1
Add up total salary and wage expenses from each business.
Step 2
Write this amount at G item P13 on your schedule. Do not show cents.
Step 3
Select from the following list the letter that matches the description of the expense component where the salary and wage expenses have been wholly or predominantly reported.
- C All included in the expense component Cost of sales
- A All included in the expense component All other expenses
- B Included in both the expense components Cost of sales and All other expenses
- O Other than Cost of sales and/or All other expenses.
Step 4
Print the letter in the Type box at the right of the amount at G item P13 on your schedule.