Update on Payroll Tax Relief Measures

A number of payroll tax relief measures have been introduced and amended to alleviate the impacts of coronavirus. Below is a quick snap shot by state.

VIC

In response to the second wave of COVID-19, the Victorian Government has increased the threshold for payroll tax deferral from $3million – $10million. Under the new rules, an eligible employer whose Victorian taxable wages did not exceed $10 million for the 2019-20 financial year can defer their payroll tax liabilities for the 2020-21 financial year.

The payment due dates are as follows:

  • July, August and September 2020 payments can be deferred until on or before 7 September 2021
  • October, November and December 2020 payments can be deferred until on or before 7 December 2021
  • January, February and March 2021 payments can be deferred until on or before 7 March 2022
  • April, May and June 2021 payments can be deferred until on or before 7 June 2022.

Businesses with annual taxable wages up to $3 million will have their payroll tax waived for the 2019-20 financial year and any amounts already paid are refundable.

Note that the above measures require eligible businesses to have lodged the 2019-20 annual reconciliation return by the due date (21 July 2020) and lodge the monthly returns by the 7th day of each following month.

Top-up payments made to employees to meet the $1500 per fortnight wage condition under the JobKeeper Payments Scheme are exempt from payroll tax.

NSW

In NSW, businesses with grouped Australian wages $10 million or less are entitled to a 25% reduction in taxes when they lodge their annual reconciliation for the 2019-20 financial year. The due date for lodgement and payment has been extended to 30 October 2020.

All businesses can deter payroll tax for July, August and September 2020 – this is now payable by 30 October 2020.

 It should be noted that there is an increase in the threshold for the 2020-21 financial year to $1 million from 1 July 2020.

Only the top-up payments made to employees to meet the $1500 per fortnight wage condition under the JobKeeper Payments Scheme are exempt from payroll tax.

WA

In WA, businesses with grouped Australian wages of $7.5 million or less at 30 June 2020 will have their payroll tax waived for the period of March to June 2020.

A one-off grant of $17,500 will be paid to business with annual Australian taxable wages of over $1 million and up to $4 million. If you were not previously registered for payroll tax, your 2019-20 Australian taxable wages will be used to determine your eligibility for the grant. Your grant will automatically be paid by cheque at the completion of the annual reconciliation process.

The payroll tax threshold increased to $1 million from 1 July 2020.

Wages subsidised by the JobKeeper Payment Scheme are exempt from payroll tax (i.e. the full $1500 per fortnight is exempt). Any amounts paid to employees above the $1500 per fortnight is taxable for payroll tax purposes.

QLD

In QLD, businesses with grouped Australian taxable wages of $6.5 million or less will be eligible for a refund on their payroll tax for July and August 2020.  The closing date for refund applications is 30 October 2020.

Payroll tax payments for the 2020 calendar year (from March onwards) can be deferred. The deferred due dates will depend on the payroll tax return period and can be found at the Business Queensland website. The closing date for deferral applications is 31 December 2020.  The website contains a link that can be used for the deferral.

Wages subsidised by the JobKeeper Payment Scheme are exempt from payroll tax (i.e. the full $1500 per fortnight is exempt). Any amounts paid to employees above the $1500 per fortnight is taxable for payroll tax purposes.

SA

In SA, businesses with Australian wages over $4 million can apply to defer their payroll tax for six months.

Eligible employers with Australian wages of up to $4 million will receive a six-month waiver and will not be required to pay payroll tax through April to September 2020 (for the return periods of March to August 2020).

Businesses with Australian wages above $4 million can apply to defer their payroll tax payments for the March to August 2020 returns periods until October 2020.

This relief does not extend to government organisations.

Wages subsidised by the JobKeeper Payment Scheme are exempt from payroll tax (i.e. the full $1500 per fortnight is exempt). Any amounts paid to employees above the $1500 per fortnight is taxable for payroll tax purposes.

For more information visit business.gov.au – COVID-19 Tax Relief Measures SA

TAS

In Tasmania, eligible businesses with wages of up to $5 million annually can apply for a waiver of any payroll tax for the entire financial year of 2019-20. Eligible Tasmanian hospitality, tourism and seafood industry employers will not be required to pay any payroll tax for the entire financial year of 2019-20.

Rebates are available for employers that pay payroll tax and commence employment of youth employees between 1 April and 31 December 2020; and apprentices and trainees in the building, construction, tourism, hospitality and manufacturing industries between 1 July 2019 and 30 June 2021.

Wages subsidised by the JobKeeper Payment Scheme are exempt from payroll tax (i.e. the full $1500 per fortnight is exempt). Any amounts paid to employees above the $1500 per fortnight is taxable for payroll tax purposes.

ACT

All ACT businesses with Australia-wide wages of up to $10 million can defer their 2020-21 payroll tax, interest free until 1 July 2022.  A six-month payroll tax waiver, from April to September 2020, is available for businesses whose operations are directly impacted by the prohibited activities list due to COVID-19.

ACT businesses in the construction industry can defer their payroll tax liability, interest-free for nine months from April to December 2020.

Wages subsidised by the JobKeeper Payment Scheme are exempt from payroll tax (i.e. the full $1500 per fortnight is exempt). Any amounts paid to employees above the $1500 per fortnight is taxable for payroll tax purposes.

NT

In Northern Territory payroll tax deferrals are available for registered employers until 21 September 2020 with total Australian taxable wages for 2019-20 of over $7.5 million, confirmed listing on the DTBI Business Hardship Register and a reduction in turnover of at least 50 per cent (rather than 30 per cent) due to COVID-19 when compared to the corresponding month or quarter in 2019.

Payroll tax waivers are available for the March to August 2020 return periods for employers with total Australian taxable wages for 2019-20 of under $7.5 million and confirmed listing on the DTBI Business Hardship Register.