{"id":"F2016L01580","name":"PAYG Withholding Variation: Labour Hire reimbursements and allowances","slug":"payg-withholding-variation-labour-hire-reimbursements-and-allowances","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":95245,"registerId":"commonwealth-F2016L01580-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"PAYG Withholding Variation: Labour Hire reimbursements and allowances","content":"Legislative Instrument\n\nPAYG Withholding Variation: Labour Hire reimbursements and allowances\n\nI, Matthew Bambrick, Acting Deputy Commissioner of Taxation, make this variation under section 15-15 of Schedule 1 to the Taxation Administration Act 1953.\n\nActing Deputy Commissioner of Taxation\n\nDated: 13 September 2016\n\n    Name of instrument\n\n    This instrument is the PAYG Withholding Variation: Labour Hire reimbursements and allowances.\n\n    2. Commencement\n    This instrument commences on the day after its registration on the Federal Register of Legislative Instruments.\n\n    3. Repealing of existing instrument\n    This instrument repeals and replaces legislative instrument PAYG Withholding Variation: Labour hire reimbursements and allowances (F2016L00436), registered on 30 March 2016.\n\n    4. Application\n    This instrument applies to payments that are covered by section 12-60 in Schedule 1 to the Taxation Administration Act 1953 within the class of cases described below.\n\n    5. Class of cases\n\nA payment for reimbursement of actual expenses incurred by the labour hire worker, provided:\n\n     the expense that the labour hire worker incurs is related directly to the labour hire worker’s work or services performed under the labour hire arrangement\n     the expenses that the labour hire worker incurred may be able to be claimed as a tax deduction at least equal to the amount of the reimbursement\n     the labour hire worker is able to substantiate the tax deduction claimed, and\n     the amount and nature of the reimbursement is shown separately in the accounting records of the payer.\n\nAn allowance payment being:\n\n     Cents per kilometre car expense payments calculated using the approved cents per kilometre rate (to a maximum of 5,000 business kilometres), or\n     Domestic or overseas travel expenses involving an overnight absence from the labour hire worker’s ordinary place of residence.\n\nProvided that:\n\n     the labour hire worker is expected to incur expenses that may be able to be claimed as a tax deduction at least equal to the amount of the allowance,\n     the labour hire worker is able to substantiate the tax deduction claimed, and\n     the amount and nature of the allowance is shown separately in the accounting records of the payer.\n\n    6. Amount to be withheld\n    The amount to be withheld from payments covered by this instrument has been varied to nil.","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"This instrument maintains its original narrow scope. It addresses a specific technical issue in the PAYG withholding system for labour hire arrangements — ensuring that genuine expense reimbursements and certain allowances are not subject to withholding. The 2016 replacement appears to be a routine update rather than an expansion of scope."},"complexity_factors":["Short document (6 sections, approximately 400 words)","Only 2 defined scenarios (reimbursements and allowances) with clear bullet-point conditions","Single cross-reference to section 12-60 of the Taxation Administration Act 1953","Simple conditional structure: if all conditions met → withholding rate is nil","No nested exceptions or complex definitional provisions","Straightforward replacement of a previous instrument (F2016L00436) with no transitional complexity"],"plain_english_summary":"This instrument lets labour-hire companies stop PAYG withholding on certain payments to workers — specifically reimbursements for work-related expenses and specified allowances (car cents/km up to 5,000 business km and overnight travel). Employers can pay these amounts in full without withholding tax.\n\nIt applies where the worker can claim the expense as a deduction, can substantiate it with records, and the payment is recorded separately. It prevents double taxation and reduces admin for labour-hire firms."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The instrument expressly repeals and replaces the earlier PAYG Withholding Variation registered 30 March 2016 but the text sets out the class of cases and nil withholding outcome without indicating an expanded or narrowed class. Based on this instrument alone, no substantive scope change is evident; it maintains application to reimbursements and specified allowances subject to the named conditions."},"complexity_factors":["Multiple eligibility criteria that must all be satisfied (expense directly related to work; deduction potential at least equal to reimbursement; worker can substantiate; payer shows amount and nature separately).","Different treatment for reimbursements versus allowances (includes cents‑per‑kilometre cap of 5,000 business km and overnight travel).","Interplay with existing tax law references: applies to payments covered by section 12‑60 of Schedule 1 to the Taxation Administration Act 1953 and is made under section 15‑15 (creates dependence on other statutory definitions and contractor/employee distinctions).","Operational compliance burden sits with both parties: payer must record amounts separately and apply nil withholding (administrative change); worker bears substantiation burden to claim deductions.","Instrument formality: repeals and replaces a prior instrument (requires administrators to track versioning and commencement timing).","Clear bright‑line withholding outcome (nil) reduces calculation complexity but increases documentation and evidentiary requirements."],"plain_english_summary":"This instrument directs that pay-as-you-go (PAYG) withholding is nil for certain labour‑hire reimbursements and specified allowances where conditions are met. It applies to reimbursements of actual work‑related expenses and to cents‑per‑kilometre (up to 5,000 km) or overnight travel allowances, provided the worker could claim an equal tax deduction, can substantiate the claim, and the payer records the amount and nature separately. Payers must stop withholding where these conditions are satisfied."}},"importantCases":[],"_links":{"self":"/api/acts/payg-withholding-variation-labour-hire-reimbursements-and-allowances","history":"/api/acts/payg-withholding-variation-labour-hire-reimbursements-and-allowances/history","analysis":"/api/acts/payg-withholding-variation-labour-hire-reimbursements-and-allowances/analysis","conflicts":"/api/acts/payg-withholding-variation-labour-hire-reimbursements-and-allowances/conflicts","importantCases":"/api/acts/payg-withholding-variation-labour-hire-reimbursements-and-allowances/important-cases","documents":"/api/acts/payg-withholding-variation-labour-hire-reimbursements-and-allowances/documents"}}