May 1, 2020   |   Blog   |   Tax

What payroll tax relief is available?

Below is a summary of all payroll tax relief packages by state and territory.

As of 5 May 2020, only WA, SA and TAS have announced their payroll tax treatment of the JobKeeper payment.

Australian Capital Territory (ACT)

Note: The ACT Government has confirmed that JobKeeper payments made to subside employee wages will be exempt from payroll tax.

In the ACT, eligible businesses have the opportunity to have their payroll tax waived for a period of time.

If your business falls within the ACT Government’s list of prohibited business activities, you may be eligible to have the payments of your payroll tax liabilities waived for up to six months from April 2020 to September 2020.

For more information and to apply, visit the ACT Revenue Office website.

New South Wales (NSW)

Depending on your company’s annual grouped wages, you may be eligible for either a reduction in payroll tax or deferral with the NSW Government.

The NSW is currently offering the following relief;

1. Pay grouped wages up to or less than $10 million

If you fall within this category, you could be eligible for a 25% discount on your payroll tax liability. If you lodge annually, your annual tax liability will be reduced by 25% and if you pay monthly, you will not need to pay for March through and including May.

2. Pay grouped wages more than $10 million

If you fall within this category, you are eligible to defer the payment of your payroll tax liability until October 2020.

In both instances, you will need to lodge your annual reconciliation by 28 July 2020.

For more information and to keep updated on New South Wales’ payroll tax relief benefits and criteria, visit the NSW Government Revenue website.

Northern Territory (NT)

The NT Government is providing payroll tax relief for companies with an annual turnover of less than $50 million that can demonstrate that they are experiencing hardship.

If your company meets the reduction in turnover requirements, it will be registered on the Central Hardship Register.

1. Pay taxable wages for 2019-20 of over $7.5 million

If your company meets the below eligibility requirements, you may be entitled to defer payment of your payroll tax liability for one or more months up until 21 September;

  • Listed on the Central Hardship Register;
  • Will pay an estimated total taxable wages of over $7.5 million for the 2019-20 period; and
  • Has had a reduction in turnover of at least 50% due to COVID-19

2. Pay taxable wages for 2019-20 of under $7.5 million

If your company meets the below eligibility requirements, you may be entitled to waive payroll tax from March 2020 to August 2020;

  • Listed on the Central Hardship Register;
  • Will pay an estimated total taxable wages of under $7.5 million for the 2019-20 period; and
  • Has had a reduction in turnover of at least 30% due to COVID-19

The NT Government has also extended the normal March payment until 15 May 2020 to allow companies to apply for the above relief measures.

Resident Employee Relief

To encourage employers to hire locally, the NT Government has extended its payroll tax exemption in relation to hiring NT resident employees. The initiative has been extended from new hires to up to 1 July 2020 to 1 July 2021.

For more information on the payroll tax relief measures and this extension, visit the NT Government’s Department of Treasury and Finance website.

Queensland (QLD)

The QLD Government is currently offering the following relief;

1. Pay taxable wages up to or less than $6.5 million

If you fall within this category, you may be eligible to receive the following;

  • A payroll tax refund for November and December 2019;
  • A waiver of your payroll tax liabilities from January 2020 to March 2020; and
  • A deferral of your payroll tax payments for the full 2020 calendar year

2. Pay taxable wages over $6.5 million

If you fall within this category and your business has been negatively impacted by COVID-19, you too also have the ability to apply for a deferral of your payroll tax payments for the full 2020 calendar year.

Furthermore, you can apply for a payroll tax refund for January and February 2020.

For more information and to apply, visit the Business Queensland website.

South Australia (SA)

Note: The SA Government has confirmed that JobKeeper payments made to subside employee wages will be exempt from payroll tax.

The SA Government is currently offering the following relief;

1. Pay grouped wages up to or less than $4 million

If you fall within this category, your company will receive a six-month waiver on payroll tax from April 2020 to September 2020.

If eligible, you will be notified by RevenueSA through their online portal.

2. Pay grouped wages over $4 million

If you fall within this category and can demonstrate that your company has been significantly impacted by COVID-19, you may be eligible to defer paying tax for the periods April 2020 to September 2020 until October 2020.

To be eligible, you will need to apply for online.

For more information and to keep updated on South Australia’s payroll tax relief benefits and criteria, visit the RevenueSA website.

Tasmania (TAS)

Note: The TAS Government has confirmed that JobKeeper payments made to subside employee wages will be exempt from payroll tax. See the TAS Government’s guidelines for more information.

The TAS Government is waiving the payment of payroll tax for 2019/20 financial year for the following Tasmanian employers:

  • Pay grouped wages of less than $5 million and can demonstrate their operations have been impacted by COVID-19; or
  • Operate within the Tasmanian hospitality, tourism and seafood industries

The TAS Government are also offering a 12-month payroll tax rebate to eligible and approved employers when they hire employees aged 24 years or under between 1 April 2020 and 31 December 2020.

For more information and to keep updated on the TAS Government’s payroll tax relief benefits and criteria, visit the State Revenue Office of Tasmania’s website.

Victoria (VIC)

On 5 May, the VIC Government announced its treatment of the JobKeeper payment, in regards to payroll tax. For employees stood down without pay, the full $1,500 per fortnight is exempt from payroll tax. For employees receiving wages, only the top-up amount (if applicable) to get to the $1,500 is exempt from payroll tax. For example, if an employee earned $1,000 in the fortnight and was topped up $500 to get to the full $1,500, only the $500 would be exempt.

Eligible employers with Victorian taxable wages of up to $3 million will be entitled to waive the payment of their payroll tax liabilities for the 2019/20 financial year.

For more information and to keep updated on the VIC Government’s payroll tax relief benefits and criteria, visit the VIC Government’s State Revenue Office website.

Western Australia (WA)

The WA Government has brought in a number of payroll tax relief measures for WA employers.

Note: The WA Government has also announced that any wages subsidised by the JobKeeper payment are exempt from payroll tax. However, for any part of wages that are not subsidised, the exemption does not apply, i.e. only the first $1,500 a fortnight for all employees being subsidised by the JobKeeper payment is exempt from payroll tax.

Payroll Tax Waiver

If you are an employer with grouped wages of less than $7.5 million at 30 June 2020, you may be eligible for your payroll tax payments to be waived from March 2020 to June 2020.

Depending on whether your company’s annual grouped wages are below or above $5 million will determine if you automatically qualify or not.

1. Pay grouped wages less than $5 million as at 29 February 2020

 If you fall within this category, you will not need to apply and simply need to follow the steps provided on the WA Government website.

2. Pay grouped wages equal to or above $5 million as at 29 February 2020

If you fall within this category and have grouped wages equal to or above $5 million but below $7.5 million, you can apply online to have your payroll tax payments waived for the above period.

You will also fall within this second category if you are a new employer that has registered for payroll tax from 1 March 2020.

If you expect to pay grouped wages equal to or above $7.5 million, you can apply online for an interest-free payment arrangement if you have concerns about meeting your payroll tax obligations.

One-Off Grant

Further to the above payroll tax relief, if you are an employer with grouped wages of more than $1 million and less than $4 million, you may be entitled to a one-off $17,500 grant.

Threshold Increase

Last year, the Pay-roll Tax Assessment Amendment (Thresholds) Bill 2019, was introduced to parliament. This bill was originally set to increase the payroll tax exemption threshold from $850,000 to $950,000 on 1 January 2020 and from $950,000 to $1 million on 1 January 2021.

The bill has been amended to bring the $950,000 threshold forward to $1 million from 1 July 2020.

For more information on the above payroll tax relief measures and to stay updated on any changes, visit the WA Government website.

Disclaimer

Information provided in this article is general information, not legal advice and should not be relied upon as such. Definitiv does not accept liability for any loss or damage arising from reliance on the content of this article.

Please be aware, information within this article is correct as of 6 May 2020.