🇦🇺Australia

Payroll Tax Liabilities for Sole Trader Brokers

3 verified sources

Definition

A 2024 NSW Supreme Court ruling determined that mortgage brokers' arrangements with aggregators classify them as employees for payroll tax purposes, subjecting revenue to tax even for sole traders averaging $182,000 revenue.

Key Findings

  • Financial Impact: AUD $68,000 per sole trader in liabilities including 5 years back taxes; potential $100,000 extra mortgage costs passed to borrowers over loan life
  • Frequency: Ongoing annual tax plus backdated liabilities
  • Root Cause: Court interpretation of broker-aggregator contracts under Payroll Tax Act lacking exemptions for sole operators

Why This Matters

The Pitch: Loan brokers in Australia 🇦🇺 face $68,000 in payroll tax liabilities including back taxes. Automation of compliance reporting and contract structuring eliminates this risk.

Affected Stakeholders

Sole trader mortgage brokers, Aggregator-dependent brokers

Deep Analysis (Premium)

Financial Impact

Financial data and detailed analysis available with full access. Unlock to see exact figures, evidence sources, and actionable insights.

Unlock to reveal

Current Workarounds

Financial data and detailed analysis available with full access. Unlock to see exact figures, evidence sources, and actionable insights.

Unlock to reveal

Get Solutions for This Problem

Full report with actionable solutions

$99$39
  • Solutions for this specific pain
  • Solutions for all 15 industry pains
  • Where to find first clients
  • Pricing & launch costs
Get Solutions Report

Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Broker Commission Costs Eroding Bank Margins

20-30% lower returns on broker-originated loans vs proprietary; combined Big Four earnings down 4.5% to AUD 30 billion in 2025 partly due to margin squeeze

Broker Fee Disclosure Non-Compliance Penalties

AUD 2,210 - 50,000+ civil penalty per contravention; potential licence suspension leading to revenue loss.

Manual Disclosure Preparation Overhead

10-20 hours per loan application at AUD 100/hour = AUD 1,000-2,000 opportunity cost per deal

Lost Deals from Disclosure Delays

5-10% deal churn at AUD 5,000 avg broker commission per loan = AUD 250-500 lost revenue per 10 deals

Verzögerte Provisionsauszahlung durch fehlerhafte oder verspätete Settlement‑Koordination

Quantified: 10 extra manual hours per loan (14h vs 4h) × AUD 60 effective hourly cost ≈ AUD 600 inefficiency per loan; at 10 loans/month ≈ AUD 6,000/month (AUD 72,000/year) in internal capacity tied up. Plus ~AUD 3,900 upfront commission lost for each loan that fails to settle due to poor coordination, typically 1–2% of files ≈ AUD 4,000–8,000 per broker per year.

Übermäßiger manueller Aufwand bei Settlement‑Koordination und Funding‑Verifikation

Quantified: 10 avoidable hours per loan × AUD 60/hour internal cost = AUD 600 extra capacity cost per loan; at 10 loans/month = AUD 6,000/month or AUD 72,000/year per broker team.

Request Deep Analysis

🇦🇺 Be first to access this market's intelligence