Salary and wage expenses are a type of operating expense and may be tax deductible.

As a business owner, you can generally claim a tax deduction for the salaries and wages you pay to employees.

Generally, to be able to claim a deduction for the payments you make to your workers, you must first comply with pay as you go (PAYG) withholding and reporting obligations for each payment. If you don’t comply, you cannot claim a deduction.

Super contributions for your employees that are made on time and to a complying super fund or retirement savings account are also generally deductible, as are salary sacrificed contributions.

Contractors count as employees if you’re paying them mainly for their labour, so they may also be entitled to super.

If you’re a sole trader, you can usually claim a deduction for your own super contributions in your personal tax return.