• P13 Total salary and wage expenses

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Did you pay salary and wages as a business expense?

    No

    Go to P14 Payments to associated persons.

    Yes

    Read on.

    You need to know

    Salary, 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) are usually deductible. However, you cannot be an employee of your business. Payments to you of salary (we deem these payments to be 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 relatives and other related entities both here and at H item P14 on your schedule. Exclude agency fees, contract payments, sub-contract payments, service fees, superannuation, management fees and consultant fees.

    Completing this item

    Step 1   Add up total salary and wage expenses from each business.

    Step 2   Write the total at G item P13 on page 4 of 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 at item P8:

    C   All included in the expense component Cost of sales
    A   All included in the expense component All other expenses
    B   Included in the expense component of both Cost of sales and All other expenses
    O   Included in expense components other than Cost of sales and All other expenses.

    Step 4   Print the appropriate letter in the TYPE box at the right of the amount at G.

      Last modified: 04 Mar 2016QC 28003