Levy Payer Information
What is portable long service leave?
The Scheme enables workers to qualify for long service leave based on their service with the construction industry rather than service with the one employer.
How is the Scheme funded?
The Scheme is statute based and is funded through a Ministerially determined levy on eligible Northern Territory construction projects of at least $1 million in value.
How is the levy calculated?
The levy is calculated as a percentage of the cost of the construction work and is payable on all eligible construction projects.
The current levy rate on projects with a construction cost between $1 million and $5 billion is fixed at 0.1%, and is calculated in accordance with the following formula:
| { |
Total cost of construction work, |
} |
x |
applicable |
= |
Levy payment (GST exempt) |
As the levy is payable prior to the start of construction work, the initial amount for calculating the levy payable is generally based on a payer’s self-assessment of the estimated total cost of the construction work. At the date of practical completion of the project, a reconciliation of the actual total cost of construction is required once the final cost is known, and may result in an additional levy or a refund, as the case may be.
A two tier levy mechanism applies for construction projects over $5 billion. The prescribed rate of 0.1% applies to the first $5 billion, and is payable prior to the start of construction work. A project specific levy determined by the relevant Minister, after consideration of a report prepared by the Scheme actuary, applies to the project cost component that exceeds $5 billion. The project specific levy component is payable following completion of the project.
As part of NT Build’s internal audit program, construction projects may be subject to routine audit.
Variations to the prescribed levy rate over time
The prescribed levy rate may be subject to change from time to time, via Government regulatory amendment.
The rate has been reduced progressively over time from 0.5% at the Scheme’s commencement, to the current rate of 0.1%, through a series of statutory amendments, with the result that for projects that started:
- on or after 7 April 2014, regardless of completion date, the levy rate of 0.1% applies.
- from 1 April 2012 to 6 April 2014, regardless of completion date, the levy rate of 0.3% applies.
- from 1 July 2009 to 31 March 2012, regardless of completion date, the levy rate of 0.4% applies.
- before 1 July 2009, regardless of completion date, the levy rate of 0.5% applies.
For further detail refer to Construction Industry Long Service Leave and Benefits Regulations.
As the levy is payable in advance, the initial amount for calculating the levy payable is generally based on a payer’s self-assessment of the estimated total cost of the construction work. Therefore, at the date of practical completion of the project, a reconciliation of the actual total cost of construction will be required as an additional levy or refund may be payable once the final cost is known.
Payers should note that, as part of NT Build’s internal audit program, construction projects may be subject to routine audit.
Who pays the levy?
The levy is payable by the person for whom the work is to be done, except where the work is to be done for the Australian Government or an interstate Government entity, in which case the principal contractor doing the work is liable to pay the levy.
Exemptions
The levy does not apply to work:
- on single detached dwellings, including related private garages, carports and sheds;
- for which the total contract price for the construction work is less than $1 million in value (effective from 7 April 2014) or $200,000 in value for projects started before 7 April 2014; or
- undertaken for not-for-profit organisations in respect of voluntary labour or donated materials.
Cost of construction work
For the purposes of the Scheme, the cost of construction work is “the total contract prices for all the construction contracts in relation to the work (the contract price for the work)”. The contract price for the work includes any applicable GST.
“Construction contract” includes contracts to:
- carry out construction work;
- supply goods relating to construction work to the site where the construction work is being carried out;
- provide, on or off site, professional services relating to the construction work; and
- provide on-site services relating to the construction work.
This covers contracts for the cost of labour, materials (including prefabricated goods and installation), equipment, design, project management, consultancy and other costs that relate to the work.
For more detailed information on goods, professional services and on-site services included in the definition of “construction contract”, please refer to the specific Levy Payer Information Sheets available on the “Publications” webpage.
What is construction work?
For the purposes of the Scheme, construction work includes commercial, domestic, industrial and civil construction, and covers (among other things) reclamation, earthmoving, landscaping, repair, maintenance, extension and demolition work.
For more detailed information on the definition of “construction work”, please refer to the “What is construction work?” Information Sheet.
Notification of work
The person for whom the work is to be done must notify NT Build of the upcoming construction work by submitting a Project Notification Form (or a Principal Contractor Project Notification Form in the case of Commonwealth or interstate Government projects), identifying the total contract price, to facilitate the levy payment. The relevant Project Notification Form can be emailed to info@ntbuild.com.au.
When is the levy to be paid?
The levy must be paid to NT Build before the construction work starts.
As part of completing the relevant Project Notification Form, the levy payer may apply to NT Build to pay the levy by instalments if the value of the levy exceeds the amount of $10,000 and the project is expected to take more than one year to complete. As a general rule, the first instalment should be not less than 50% of the total levy amount due, with the balance to be paid in two equal further instalments.
NT Build may approve or refuse a levy instalment application, or decide to vary its terms.
If a levy payer fails to pay an instalment in accordance with an approved instalment plan, the approval will cease to have effect and the amount of the levy that remains unpaid will become immediately payable, start to bear interest and be recoverable in a court of competent jurisdiction. The amount recoverable may also include any costs associated with the recovery of the unpaid levy amount.
Construction cost reconciliation process
On completion of the project, once the final total contract price is known, the levy payer is required to submit a Project Reconciliation Form. NT build will send the levy payer this form on or around the anticipated project completion date, as specified by the levy payer on the Project Notification Form. If the total construction contract price is lower than the amount specified on the Project Notification Form, the levy payer will be entitled to a refund. If it is higher, the levy payer will be required to pay any additional levy amount.
Penalties for not paying the levy
Interest and fines may be imposed if the levy is not paid when due.
The Act also grants NT Build the power to issue an order to stop work on the project until such time as the levy payer has met its statutory responsibility.
How to pay the levy
Following its receipt and consideration of the relevant Project Notification Form, NT Build will issue the levy payer with a tax invoice.
Payment will be accepted by cheque or EFT (payments by cash or credit card are not accepted). Further information is available by phoning NT Build on 1300 795 855.
Further information
For more detailed information the levy payment process, please refer to the specific Levy Payer Information Sheets available on the “Publications” webpage.