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Edited version of your written advice
Authorisation Number: 1051408816463
Date of advice: 1 August 2018
Ruling
Subject: PAYG W exemption
Question
Is there an obligation on entity A to withhold from payments made to casual referees who officiate in tournaments under section 12-35 of Schedule 1 to the Taxation Administration Act 1953 (TAA)?
Answer
No
This ruling applies for the following periods:
Year ending 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
The scheme commences on:
1 July 2018
Relevant facts and circumstances
Entity A administers tournaments that require match officials. These tournaments provide an opportunity for experienced and/or skilled hobbyists to referee a superior skilled game. Entity A refers to such referees as casual referees.
There is no contract of employment nor is a guarantee provided to any appointed casual referee on how many matched they will officiate.
All training, local travel, meal and incidental costs are born by the casual referee.
The rates payable are reflective of the role and responsibility assumed by the officials on a per match basis.
It is anticipated that the employed referees will assume the most senior appointment of referee per match where possible, but a casual referee may be assigned this role.
In rare cases a casual referee will officiate outside their local area. This confines the maximum number of matches officiated by casuals to approximately 10 games per annum.
Entity A has anticipated that the maximum a casual referee could earn is $xxx however the majority will not earn over $xxx.
There are approximately 30 casual referees who fall into the category as described above.
Relevant legislative provisions
Taxation Administration Act 1953 Section 12-35 of Schedule 1
Reasons for decision
Section 12-35 of Schedule 1 to the Taxation Administration Act 1953 (TAA) states an entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity).
Taxation Ruling TR 2005/16 Income Tax: Pay As You Go – withholding from payments to employees considers the various indicators the Courts have considered in establishing whether a person engaged by another individual or entity is an employee, within the common law meaning of the term, for the purposes of section 12-35 of Schedule 1 to the TAA.
After comparing the facts of your case against the generally considered indicators of; control, organisation or integration, results, delegation, risk, and provision of tools and equipment, it is considered that your casual referees are not employees of Entity A, therefore there is no obligation to withhold from payments made to them under section 12-35 of Sch 1 to the TAA.