Why do construction businesses need to pay attention to LSC and TPAR?

Employers in the NSW building and construction industry are subject to the portable long service leave scheme administered by the Long Service Corporation (LSC). On top of that, building and construction businesses must lodge a Taxable Payments Annual Report (TPAR) each year, reporting contractor payments to the Australian Taxation Office (ATO).

Other industries also have long service leave administered by the LSC and TPAR lodgement obligations.  Contact us if you’d like more information about your industry.

What is portable long service leave in the construction industry?

Under the NSW construction industry scheme, workers accrue long service leave based on service in the industry – not with a single employer.

• This applies to most workers performing building and construction work in NSW
• It covers full-time, part-time and casual workers
• Some contractors performing eligible construction work may also be covered
• Workers accumulate service across different construction employers

When a worker becomes entitled to long service leave, the LSC pays the benefit directly. Employers fund the scheme through levy payments.

What are the employer obligations for the LSC scheme?

• Register your business with the Long Service Corporation
• Register eligible workers
• Lodge an employer return reporting days worked
• Due date: 31 July each year (for employees paid to 30 June)
• Pay the construction industry levy by the due date
• Maintain accurate payroll and contractor records

What is a TPAR and who has to lodge one?

All businesses primarily engaged in building and construction services must lodge a TPAR reporting payments made to contractors for building and construction services.

• Reports contractor name, ABN, address and total payments
• Covers labour-only contractors and subcontractors
• Includes GST where applicable
• Due date: 28 August each year (for payments made to 30 June)

The ATO uses TPAR data to cross-check contractor income, GST reporting, superannuation compliance and industry scheme reporting.

What are the common compliance risks in construction?

• Treating workers as contractors when they fall within the LSC scheme
• Not registering casual or short-term site workers
• Failing to include all subcontractor payments in the TPAR
• Mismatch between payroll, BAS, super and TPAR totals

Practical compliance tips for builders & contractors

Conduct an annual compliance review before 30 June each year. Reconcile payroll totals, superannuation, BAS figures, LSC returns and contractor payments to ensure consistency before lodging your TPAR.

Proactive compliance reduces audit risk and protects your building and construction business from unexpected liabilities.

This article provides general information only and does not constitute personal financial, tax or legal advice. Dates, thresholds and obligations are current at the time of writing and may change. You should consider your own circumstances and seek advice tailored to your business before acting.