Private ruling: Pay As You Go Withholding
Date of advice: 18 May 2019
Published: July 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Are you required to withhold income tax under Pay As You Go for the Instructor? | A1: No. After assessing the facts and circumstances against the indicators in TR 2005/16, the Commissioner considers that the workers are contractors, and there is no obligation on the entity to withhold from payments made to the workers. Further information can be found by searching “QC 33189” at ato.gov.au.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You currently contract an instructor to conduct classes at the Leisure Centre. You pay the instructor an amount per session. The instructor runs three classes with differing rates that were negotiated between the instructor and yourself. The instructor has an ABN and invoices you every fortnight. You provide the instructor with a room to conduct their sessions, and you are able to change the time and frequency of the sessions. You provide relevant mats to use, and the instructor brings their own music to conduct the sessions. The instructor takes on their own commercial risks and they pay for their own professional and public liability insurance. The instructor runs the class their own way, provided they stay within the agreed style. The centre maintains the safety standards to protect centre customers. Customers attending the sessions pay the Centre through their membership fees or casual entry fees. The instructor is free to accept or refuse additional work, and can promote cross services. The instructor employs alternate staff when undertaking session, and you are invoiced exactly the same for each session. Any new instructor also is required to undertake your safety induction.

Relevant legislative provisions: Taxation Administration Act 1953 Section 12-35 of Schedule 1