NSW Payroll Tax 

The MFAA and industry partners are actively advocating for a moratorium on the application of payroll tax to mortgage and finance brokers until the law is clarified.

Revenue NSW has been auditing aggregators in an attempt to apply payroll tax on commissions paid to brokers. This ongoing issue could have significant financial implications for the mortgage and finance broking industry across the country.

MFAA’s advocacy on material events

In March 2023, the MFAA launched a campaign calling for a stop action on new audits until the legal framework is clear.

As a result, Revenue NSW agreed not to commence any new payroll tax audits on aggregators while the issue remains unresolved.

Several court cases have since been brought by aggregators challenging Revenue NSW’s interpretation of the law.

Latest court ruling – Loan Market case

On 12 April 2024, the NSW Supreme Court ruled in the Loan Market Group Pty Ltd vs. Chief Commissioner of State Revenue case.

The court determined that, under the agreements between Loan Market and its brokers, mortgage broker commissions are subject to payroll tax under the contractor provisions of the legislation.

The ruling also clarified exemptions, confirming that common industry practices such as offshore loan processing may reduce payroll tax liability.

Final orders were issued on 6 November 2024, with no appeals filed by either party.

What’s next?

The MFAA has actively engaged with both the NSW government and opposition to advocate for legislative clarity and fairness. Our efforts have helped secure a NSW parliamentary inquiry, where the NSW Legislative Council will review key provisions of the Payroll Tax Act 2007, with MFAA CEO Anja Pannek appearing at the hearing on 21 March 2025.

Frequently Asked Questions

Revenue NSW is seeking to apply payroll tax to the commissions your aggregator pays you, interpreting that you are an employee, representative, or agent of your aggregator.

Some aggregators have challenged this interpretation in the Supreme Court of NSW, with the Loan Market case being the first ruling handed down on 12 April 2024. Both parties have 28 days to appeal the decision.

While this has been under discussion for years, there has been a recent increase in audits, assessments, and legal action by Revenue NSW. The Loan Market case ruling and Finsure’s legal challenge against Revenue NSW have brought the issue into the spotlight.

The decision sets a legal precedent that could:

  • Impact other aggregators and brokers
  • Lead to other states imposing payroll tax on broker commissions

The MFAA believes that, as an independent small business owner, your commissions should not be subject to payroll tax.

Revenue NSW is the tax regulator for the NSW Government responsible for collecting taxes, including payroll tax.

As of 1 July 2022, the payroll tax rate is 5.45% on total wages exceeding the $1.2 million threshold.

  • No. Salaried brokers are not affected by this ruling.
  • Indirectly, if smaller broker businesses struggle or close, employment opportunities may decrease.
  • Some businesses may pass down costs in the form of lower commission splits or reduced benefits.

MFAA’s actions on the NSW Payroll Tax issue

In March 2023, the MFAA launched a campaign urging brokers to contact their local MPs to call for a moratorium on payroll tax action until there was industry certainty.

  • Over 1,300 brokers contacted their MPs.
  • As a result, Revenue NSW agreed to stop new audits on aggregators until the Loan Market decision was made.
  • This stop action remains in place, including for any appeals to the Loan Market ruling.

Not at this stage. The MFAA welcomed the establishment of a parliamentary inquiry into NSW Payroll Tax legislation and will be using this avenue to advocate for changes to legislation.

Payroll Tax and your business

Payroll tax applies unless an exemption applies. Businesses may be exempt if:

  • They employ two or more people performing work under the contract
  • Those roles are not considered minor (de minimis)

The Loan Market ruling broadened Revenue NSW’s interpretation of exemptions to include:

  • Offshore loan processing
  • Engaging contractors or family members for administrative support

Yes. The Loan Market decision appears to apply regardless of your business structure, including:

  • Sole traders
  • Directors of an incorporated company

No. The ruling appears to apply to all brokers, whether they:

  • Hold their own ACL
  • Operate as a credit representative under an aggregator’s ACL

The judgment did not directly address this scenario. You should consult:

  • Your aggregator
  • A legal or tax professional

The Loan Market case focused on contracts between LMG and mortgage brokers. Whether this applies to commercial brokers depends on:

  • The contractual relationship with your aggregator
  • The nature of services provided

The Loan Market ruling suggests businesses may reduce payroll tax exposure by:

  • Employing an administrative assistant or loan processor
  • Engaging another business as a service provider

For tax planning, consult your accountant or legal advisor.

Potential Financial Impact

Payroll tax applies to aggregators, but the tax is based on the commissions paid to you.

  • Some aggregators may pass on payroll tax costs to brokers.
  • Since brokers do not receive payments directly from clients, it may be difficult to pass the tax down.

The MFAA is concerned about:

  • Increased financial strain on brokers
  • Reduced industry sustainability

  • Your accountant or tax professional
  • Your aggregator for guidance

The payroll tax rate is 5.45% of total "wages", but the full impact depends on:

  • Your aggregator’s approach to handling tax liabilities
  • Any exemptions your business may qualify for

Implications for brokers outside NSW

Not yet. However:

  • If payroll tax is applied in NSW, other states may follow.
  • Payroll tax laws are harmonised across all states except Western Australia.
  • The Loan Market ruling may serve as a precedent in other states.

Where the tax liability arises will determine how other jurisdictions apply this ruling.

The MFAA is actively monitoring payroll tax developments across Australia. Our efforts include:

  • Frequent engagement with the Victorian State Revenue Office (VicSRO) and the Victorian Government
  • Proactive advocacy to prevent retrospective tax applications in other states
  • Monitoring potential policy changes in Queensland, South Australia, and Western Australia

Ready to take the next step?

The MFAA cannot provide legal advice. If you have concerns, contact:

  • Your aggregator for guidance
  • Your accountant or tax professional

For general queries about MFAA’s advocacy on payroll tax, email us at payrolltax@mfaa.com.au.

The MFAA acknowledges Traditional Owners of Country throughout Australia and recognises their continuing connection to lands, waters, and communities. We pay our respects to Aboriginal and Torres Strait Islander cultures, and to Elders past and present.
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 MFAA | Mortgage and Finance Association of Australia

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