Division 8(1) For the purposes of this Act, an employment agency contract is a contract, whether formal or informal and whether express or implied, under which a person (an employment agent) procures the services of another person (a service provider) for a client of the employment agent.(2) However, a contract is not an employment agency contract for the purposes of this Act if it is, or results in the creation of, a contract of employment between the service provider and the client.(3) In this section:contract includes agreement, arrangement and undertaking.
38 Persons taken to be employers
For the purposes of this Act, the employment agent under an employment agency contract is taken to be an employer.
39 Persons taken to be employees
For the purposes of this Act, the person who performs work for or in relation to which services are supplied to the client under an employment agency contract is taken to be an employee of the employment agent.
(1) For the purposes of this Act, the following are taken to be wages paid or payable by the employment agent under an employment agency contract:(a) any amount paid or payable to or in relation to the service provider in respect of the provision of services in connection with the employment agency contract,(b) the value of any benefit provided for or in relation to the provision of services in connection with the employment agency contract that would be a fringe benefit if provided to a person in the capacity of an employee,(c) any payment made in relation to the service provider that would be a superannuation contribution if made in relation to a person in the capacity of an employee.(2) Subsection (1) does not apply to an employment agency contract to the extent that an amount, benefit or payment referred to in that subsection would be exempt from payroll tax under Part 4 (other than under Division 4 or 5 of that Part, section 50 or clause 5 of Schedule 2) had the service provider been paid by the client as an employee, if the client has given a declaration to that effect, in the form approved by the Chief Commissioner, to the employment agent.
Subject to section 42, if an employment agent under an employment agency contract:(a) by arrangement procures the services of a service provider for a client of the employment agent, and(b) pays payroll tax in respect of an amount, benefit or payment that is, under section 40, taken to be wages paid or payable by the employment agent in respect of the provision of those services in connection with that contract,no other person (including any other person engaged to procure the services of the service provider for the employment agent’s client as part of the arrangement) is liable to pay payroll tax in respect of wages paid or payable for the procurement or performance of those services by the service provider for the client.
42 Agreement to reduce or avoid liability to payroll tax
(1) If the effect of an employment agency contract is to reduce or avoid the liability of any party to the contract to the assessment, imposition or payment of payroll tax, the Chief Commissioner may:(a) disregard the contract, and(b) determine that any party to the contract is taken to be an employer for the purposes of this Act, and(c) determine that any payment made in respect of the contract is taken to be wages for the purposes of this Act.(2) If the Chief Commissioner makes a determination under subsection (1), the Chief Commissioner must serve a notice of the determination on the person taken to be an employer for the purposes of this Act.(3) The notice must set out the facts on which the Chief Commissioner relies and the reasons for the determination.(4) This section has effect in relation to agreements, transactions and arrangements made before, on or after the commencement of this section.