The wages paid by a group training organisation (GTO) to an apprentice or trainee may be exempt from payroll tax.
GTOs directly employ apprentices and trainees, then hire them to other businesses – called host employers – while they are undertaking their training.
If you are a recognised GTO, the wages you pay to the apprentice or trainee may be exempt from payroll tax. They must be employed under a training contract that meets the requirements of an approved training scheme.
Wages paid to re-employed apprentices or trainees may also be exempt.
New entrant requirements
To be eligible for this exemption, the apprentice or trainee must be employed by an approved GTO.
If the apprentice or trainee has not previously signed a training contract with the GTO, and:
- is a full-time employee, they must enter a training contract with the GTO within 3 months of starting employment, or
- is a part-time employee, they must enter a training contract with the GTO within 12 months of starting employment.
Example 1: full-time employment
Nick joins GTO Green as a full-time employee on 4 February 2025.
He then signs a training contract with GTO Green for an apprenticeship with Plumbers United on 28 April 2025 (within 3 months of being employed full-time by GTO Green).
The wages GTO Green pays Nick are exempt from payroll tax for the duration of his training contract.
Example 2: part-time employment
Maria starts as a part-time employee with GTO Red on 12 September 2024.
She signed a training contract with GTO Red for an apprenticeship with ABC Carpentry Ltd on 20 March 2025 (within 12 months of being employed part-time by GTO Red).
Maria’s wages paid by GTO Red are exempt from payroll tax for the duration of her training contract.
If a trainee or apprentice has previously signed a training contract with a GTO, they must enter another training contract within 3 months of the previous contract’s expiry date to be eligible for this exemption.
The previous contract must have been with the same GTO and must satisfy the timeframes for full-time or part-time employees as outlined above.
Example 3
Full-time employee Linda finished an apprenticeship with Plumbers United on 11 December 2024 and decided to become an electrician instead.
She signed a training contract with GTO Green for an apprenticeship with Sparky City on 3 February 2025 (within 3 months of her Plumbers United contract expiring).
Linda’s wages are exempt from payroll tax for the duration of her training contract with GTO Green.
Become a recognised GTO
To receive the exemption, the Victorian Treasurer must declare your organisation a recognised GTO. The declaration must be published in the Victorian Government Gazette.
You must write to us to request the Treasurer’s declaration. You need to provide your company name, registered business address and ABN.
You must also obtain a written recognition from the Victorian Registration and Qualifications Authority (VRQA). You can find instructions on the VRQA website.
We apply to the Treasurer on your behalf, and send you the application outcome in writing.
Next steps
Once you are declared a recognised GTO, wages to your new entrants are exempt from payroll tax. You do not need to include them in your payroll tax returns.
Payroll tax still applies to other wages, unless another payroll tax exemption applies. This may include wages to administration staff and apprentices or trainees who do not meet the exemption requirements.
You must include these non-exempt wages in your payroll tax returns.
Evidence
As a recognised GTO, you must keep records to prove your exemption, including:
- written recognition from the VRQA
- the names of the apprentices and trainees
- the dates of employment
- the apprenticeship and traineeship details
- wages to the apprentices and trainees.
