Peter runs his own bricklaying business and is considering hiring a full time worker. He will pay his employee a gross wage of $48,500 p.a. His employee is also entitled to 4 weeks paid annual leave and 10 public holidays (2 weeks total). He knows that he has to pay PAYG withholding tax out of the gross wage figure (calculation not required), and has been advised that he has to pay 1.85% in WorkSafe insurance. 

a. If this will be Peter’s only employee, does he have to pay payroll tax? (2 marks) 

b. Are there any other costs Peter needs to factor in? List and briefly explain. (2 marks)

c. Calculate (showing workings) the full cost to Peter of hiring the above worker. (6 marks)

d. If Peter gives his worker the work vehicle and allows him to use it for personal travel, does this get taxed as well? If so, who pays the tax? (2.5 marks)

Answer rating: 100% (QA)

a Yes bpayroll taxes are taxes paid on the wages and salaries of employees These taxes are used ... View the full answer