44 Payments to associated persons

For partnerships, show at M the amounts, including salaries, wages, commissions, superannuation contributions or allowances, paid to:

  • a relative of a partner
  • another partnership in which a relative is a partner
  • a shareholder or director (or their relatives) of a private company that is a partner in the partnership
  • a beneficiary (or a relative of a beneficiary) of a trust where the trustee is a partner in the partnership.

Do not show at M the amounts paid to a partner in the partnership.

Also, include the amounts of salaries and wages paid to an associated person, relative, principal, agent, related entity or associate entity at item 43 Total salary and wage expenses.

Record keeping

Excessive payments to a relative or other related entity may not be deductible (see section 26–35 of the ITAA 1997). Keep a record of the following to establish the reasonableness of remuneration:

  • full name of relative or other related entity
  • relationship
  • age, if under 18 years old
  • nature of duties performed
  • hours worked
  • total remuneration
  • salaries or wages claimed as deductions
  • other amounts paid, for example, retiring gratuities, bonuses and commissions.
Last modified: 10 Aug 2016QC 48217