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Generally, a group training organisation (GTO) employs apprentices and trainees and hires them to other businesses, called host employers, while they are undertaking their training. The GTO pays wages to the apprentices or trainees and is entitled to an exemption from payroll tax on those wages if:

  • The apprentice or trainee is a new entrant who is employed in accordance with the requirements of an approved training scheme.
  • The Victorian Treasurer declares in the Victorian Government Gazette that the GTO is an approved GTO.

For wages paid or payable from 1 July 2018, it does not matter whether you are a ‘for-profit’ or ‘not-for-profit’ GTO. Wages paid or payable before 1 July 2018 by ‘for-profit’ training organisations are not exempt.

Who is a new entrant?

For the purpose of this exemption,a new entrant is an apprentice or trainee employed by an approved GTO, and who meets the following requirements:

  • They have not previously signed a training contract with the GTO and:
  • they are a full-time employee who enters into a training contract with the GTO within 3 months of starting employment with them, or
  • they are a part-time employee who enters into a training contract with the GTO within 12 months of starting employment with them.
  • They have previously signed a training contract with a GTO and they enter into another training contract within 3 months of the expiry date of the previous contract. That previous contract must have been with the same GTO and must satisfy the requirements for full-time or part-time employees timeframes set out above.

In the examples below, all of the training contracts are within the approved training schemes.

Example 1

Nick signed with GTO Green on 4 August 2017 as a full-time employee. He signed a training contract on 14 September 2017 (within 3 months of being employed full-time by GTO Green) for an apprenticeship with Plumbers United. Nick’s wages paid by GTO Green are exempt from payroll tax for the duration of his training contract.

Example 2

Maria commenced her part-time employment with GTO Green on 2 May 2018. She entered into a training contract with them on 12 December 2018 (within 12 months of being employed part-time by GTO Green) for an apprenticeship with Plumbers United. Maria’s wages paid by GTO Green are exempt from payroll tax for the duration of her training contract.

Example 3

Linda finished an apprenticeship with Plumbers United on 11 December 2017 and decided to become an electrician instead. She entered into a training contract with GTO Green for an apprenticeship with Sparky City on 1 March 2018 (within 3 months of her Plumbers United training contract expiring). Linda’s wages are exempt from payroll tax for the duration of her training contract with GTO Green.

What is an approved training scheme?

Approved training schemes are training schemes approved by the Victorian Registration and Qualifications Authority and published in the Victorian Government Gazette.

How do I become a declared GTO?

The Victorian Treasurer must declare your organisation an approved GTO for you to receive the exemption. The declaration must be published in the Victorian Government Gazette.

You must write to us to get the Treasurer’s declaration. You need to provide you company name, registered business address and ABN.

You must also obtain a written recognition from the Victorian Registration and Qualification which regulates GTOs as employers of apprentices and trainees under Part 5.5 of the Education and Training Reform Act 2006. Detailed steps and requirements can be found on the Victorian Registration and Qualifications Authority website.

We apply, on your behalf, to the Treasurer to declare you an approved GTO and let you know the outcome of the application in writing.

The Treasurer must consult the Minister for Education and Training before declaring you an approved GTO. If the Treasurer does declare you an approved GTO, the declaration will be published in the Victorian Government Gazette.

What happens once I am declared an approved GTO?

Once you are declared an approved GTO, any wages paid or payable by you to your new entrants employed in accordance with the requirements of an approved training scheme are exempt wages and do not need to be included in your monthly payroll tax return.

Wages paid or payable by the GTO to persons who are not new entrants employed under an approved training scheme are taxable wages, unless another payroll tax exemption applies. These may include but are not limited to:

  • Administration staff.
  • Employees who are not new entrants where a GTO has separate functions or arms from solely providing subsidised training.
  • Apprentices or trainees who are found not to meet the new entrant eligibility requirements, or not employed under an approved training scheme.

In these cases, the GTO must make a voluntary disclosure to the State Revenue Office and pay the appropriate amount of payroll tax.

As an approved GTO, you must maintain relevant records to substantiate your exemption claim, including:

  • written recognition from the Victorian Registration and Qualifications Authority,
  • the name of the apprentice/trainee,
  • date of employment,
  • the apprenticeship/traineeship details,
  • the amount of wages paid for the relevant financial year.
Last modified: 11 November 2020
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