Private ruling: Pay-As-You-Go Withholding
Date of advice: 28 January 2026
Published: 23 March 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the Footballers' match payment subject to Pay As You Go Withholding (PAYGW) pursuant to section 12-35 of Schedule 1 Part 2-5 of the Tax Administration Act 1953 ? | A1: Yes. | Q2: Are the Footballers' sign-on bonus payment subject to Pay As You Go Withholding (PAYGW) pursuant to section 12-35 of Schedule 1 Part 2-5 of the Tax Administration Act 1953 ? | A2: Yes. | Q3: Are the Footballers' achievement bonuses subject to Pay As You Go Withholding (PAYGW) pursuant to section 12-35 of Schedule 1 Part 2-5 of the Tax Administration Act 1953 ? | A3: Yes.

Relevant facts and circumstances: This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. Find out more about when you can rely on your private ruling at ato.gov.au/relyonprivateruling. 1. The Club is a not-for-profit incorporated association. The Club is a grassroots rugby league organisation and participates in the local community league competition that is run by the XXXX. 2. A football season incorporates 16 rounds played between March and September with the top 5 teams playing off in the grand finals. The club has A Grade Players and Reserve Grade Players. Players who must register with XXXX and are only able to play for one club for the season. The club can only have a maximum of 20 A Grade players and 20 Reserve Grade players for the season. The club's financial period is from the 1 October to 30 September. 3. Both A Grade players and Reserve Grade players are responsible for their own: • Football boots, mouthguards and other personal safety equipment • Health or medical insurance and all other medical expenses • Travel costs • Laundry • Gym membership • Training equipment at home • Any other costs or expenses they incur in playing Football 4. Players are required to remit a registration fee to the XXXX in order to be eligible to play. Additionally, players are obligated to pay a registration fee to the XXXX Club. Both A Grade and Reserve Grade players sign a player's contract agreeing to the match payment amounts. Players receive a club shirt and training shorts as part of their payment to the club. 5. The Club supplies all players with: • Playing uniform for game day matches which is retained by the club, and • A limited amount of strapping and first aid equipment on game days only 6. Match payments are provided to players as an incentive to promote community involvement in local rugby league by offsetting the expenses related to participation. These payments aim to help cover the costs that players incur while engaging in rugby league and are not intended to be used for other everyday financial obligations. 7. All players do not receive: • Match payments if they do not play • Payment for pre-season training • Payment for training sessions during the season, or • Payment for attending club functions 8. A select number of A Grade Players receive a Sign-on bonus to incentivise their commitment to the XXXX over other clubs in the local league competition. Not all A Grade Players, nor any reserve grade players, receive a sign-on bonus. As an incentive to A Grade Players only, the club may pay an achievement bonus to each player who plays and wins a certain number of matches. 9. Players are not obligated to train or play a game each week and are free to advise if they do not want to play. Players do not receive a match payment if they do not play. All participants have various other sources of income and are not dependant on the monetary compensation offered by XXXX for their engagement in rugby league as a leisure activity.

Relevant legislative provisions: Taxation Administration Act 1953 (TAA) Schedule 1 section 12-35 Taxation Ruling 2023/4

Reasons for decision: Summary: An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as a common law office holder in the service of the Commonwealth, a State or a Territory. XXXX providing employment contract to players are to withhold tax with reference to match payment, sign-on bonus payments and achievement bonuses made to footballers. | Detailed Reasoning - Detailed reasoning: Section 12-35 of the Tax Administration Act 1953 (TAA) provides that 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). For section 12-35 of TAA to apply, there must be a payment of salary, wages, commission, bonuses, or allowances made by an entity (the entity does not need to be the employer) to an employee: • as a consequence of their employment, and • as an individual in their capacity as an employee. | Detailed Reasoning - Who is an employee: The term 'employee is not defined in the TAA and it has its ordinary meaning. There are general tests that have been developed by the courts to assist in the determination of the nature of the relationship. However, defining the contractual relationship between the employer and employee can be difficult and will depend on the facts of each case. In deciding whether an individual is a common law employee, there are a number of common law factors to consider. The common law factors discussed in the Taxation ruling 2023/4 that have been considered are discussed below: The test to be applied in determining if a relationship is one of employment are: Serving in the engaging entity's business The correct characterisation of the business being carried on by the engaging entity is an essential part of determining whether the worker is working in the business of the engaging entity. Therefore, a sportsperson who plays games in the Club easily indicates they are serving in the engaging entity's business. | Detailed Reasoning - Control and the right to control: An employer generally has a right to control how, where and when its employee performs their work. The importance of control in this context lies not in its actual exercise, but rather in the contractual right of the employer to exercise such control. In this case, it is the club that determines when and where the players can play, the club exercising significant control by the player in the contract, for example the players are only able to play for one club for the season. | Detailed Reasoning - Other indicia like: The ability to delegate, subcontract or assign work.The decision of whether you can delegate, or subcontract is significant factor in determining whether a worker is an employee and an independent contractor. If a person is contractually required to personally perform the work, this is an indication that the person is an employee. In this case, the players do not have the ability to delegate their work nor does not find someone to play on their behalf. They are directly providing service to the club and therefore, their job is limited in scope. The club has the ability to source another worker and legally delegate as their like. Consequently, this will indicate a worker is an employee of the engaging entity. | Detailed Reasoning - Result test: In contracts to produce a result, payment is often a negotiated price for the specified outcome. Where the substance of a contract is to achieve a specified result, there is a strong (but not conclusive) indication that the contract is one for services. In this case players have been contracted to perform specific tasks, a service to one party to another with required equipment's provided by the payer to produce a result. The way in which a worker is remunerated for their services, and process through which the parties determine this remuneration, can help to identify whether a worker is being engaged to serve in an engaging entity's business or has merely contracted with that business to produce a specified result. In your case, the XXXX pays the contracted players based on a particular remuneration condition for the 20 A Grade players and 20 Reserve Grade players with executed agreements to play only for XXXX. The players receive a payment for a match win with a range from $XX to $XX per game and a match payment for the draw or loss is $XX to $XX. Provision of tools and equipment Taxation Ruling 2023/4 paragraph 66 stipulates that the provision of assets, equipment and tools by a worker, and the incurring of expenses and other overheads, may be an indicator that the worker is an independent contractor. However, a worker bringing their own tools is not automatically inconsistent with an employment relationship. The nature, scale and cost of the tools and equipment must be considered. Furthermore, an employee, may be reimbursed (or receive an allowance) for expenses incurred in the course of employment, including for the use of their own assets such as a car. In contrast it may be more common for an independent contractor to factor these anticipated expenses into a negotiated price for services | Detailed Reasoning - Risk: Where the worker bears little or no risk of the costs arising out of injury or defect in carrying out their work, they are more likely to be an employee. On the other hand, an independent contractor bears the commercial risk and responsibility for any poor workmanship or injury sustained in the performance of work. In this case, as per the agreement stated in your application, the player pays for their own health or medical insurance and all other medical expenses. Even though the players paying for their own medical insurance and expenses indicate some level of personal risk, it is only one possible indicator. It does not override the broader assessment of contractual rights and obligations. Under section 12-35 of TAA and TR 2023/4, employee classification depends on the overall contractual relationship, not on isolated financial responsibilities such as medical costs. | Detailed Reasoning - Conclusion: Based on section 12-35 of the TAA and the common law employment indicators outlined in Taxation Ruling 2023/4, the contractual arrangements between XXXX and its players establish an employment relationship. Therefore, XXXX must withhold tax from match payments made to players.