Non-profit non-government schools
Until 30 June 2024, wages paid by all non-profit non-government schools to people in relation to the provision of education within that school were exempt wages.
For the purposes of this exemption, a non-government school is one of the following:
- A non-government school under the meaning in the Education and Training Reform Act 2006 that is registered under that Act.
Examples of schools that would meet this criterion would include most conventional non-government primary or secondary schools.
- A school or college that satisfies all the following conditions:
- It operates on a not-for-profit basis.
- It is not carried on by or on behalf of the State of Victoria.
- It provides education at or below the secondary level.
- The majority of students are aged under 19 years.
- It must have been in existence as a school or college that conformed to the above criteria before 27 May 1997.
For a school or college of this type, the exemption is limited to wages paid or payable to a person in relation to the provision of education at or below secondary level. An example of a school or college that would meet these criteria would be an organisation offering specialist career tuition in drama for school age students and providing education at or below secondary level.
- A school or college that satisfies the following conditions:
- It operates on a not-for-profit basis.
- It is not carried on by or on behalf of the State of Victoria.
- It provides education predominantly at or below the secondary level.
- It is not a technical school or technical college.
- It must have been in existence as a school or college that conformed to the above criteria before 27 May 1997.
For a school or college of this type, the exemption is limited to wages paid or payable to a person in relation to the provision of education at or below secondary level. An example of a school or college that would meet these criteria would be an adult educational service that provides predominantly secondary education, such as Victorian Certificate of Education (VCE) subjects.
Effective from 1 July 2024, the payroll tax exemption for non-profit non-government schools only applies to non-profit non-government schools that have been declared by the Minister for Education.
Undeclared non-profit non-government schools
Effective from 1 July 2024, non-profit non-government schools not declared by the Minister for Education are ineligible for the payroll tax exemption applicable to non-profit non-government schools, religious institutions or charities.
From 1 July 2024, non-profit non-government schools who pay taxable wages above the relevant thresholds are required to register and pay payroll tax.
School councils
Wages paid or payable by a school council to a person in relation to the provision of education are exempt wages. For the purposes of the Payroll Tax Act 2007, ‘school council’ has the same meaning under the Education and Training Reform Act 2006.
Non-profit educational services providers
Until 30 June 2024, wages paid by a non-profit educational service provider that provided an educational service in connection with the curriculum of schools or colleges that were eligible for the non-profit non-government schools exemption were exempt from payroll tax. The exemption applied to wages paid or payable to a person for the provision of the educational service.
From 1 July 2024, the payroll tax exemption for non-profit educational services providers only applies to wages paid or payable for an educational service that is provided by a person in connection with the curriculum of a declared school.
From 1 July 2024, employers providing educational services in connection with the curriculum of undeclared schools are not eligible for the payroll tax exemptions for non-profit educational services providers, religious institutions or charities.
Non-profit requirement
For the purposes of these exemptions, non-profit means that the school, college or educational service provider must not conduct its activities for the profit or gain of the individual members of its governing body or organisation. In addition, assets must not be distributed to the individual members of its governing body or organisation in the event of the winding-up or dissolution of the school, college or educational service provider.
