Tax Source

Wiki for Australian Tax Information


Contractor, Sub-Contractor & Commission Expenses

This is the total costs of employing staff and contractors recognised according to accounting principles during the relevant period.

This field is where an entity separates out the tax deductions available for payments to external labour. Although mostly speculation the purpose of this field is for the ATO to assess whether the entity is high risk. Payments to subcontractors in the building and construction industry have been reporting deductions for payments to contractors who are not reporting income.

Contractor, subcontractor and commission expenses Show the amount of expenditure incurred for labour and services provided under contract other than those in the nature of salaries and wages, for example:

  • payments to self-employed people, such as consultants and contractors
  • commissions paid to people not receiving a retainer
  • agency fees such as advertising
  • service fees such as plant service
  • management fees
  • consultant fees.

Do not include the following:

  • expenses for external labour which are incorporated into the amount shown at E Cost of sales
  • expenses for accounting or legal services; show these at N All other expenses.