State & Territory updates

Payroll tax relief 

 

Payroll tax - State & Territory updates

The State and Territory Governments have been announcing payroll tax relief that will be offered to business impacted by COVID-19. These concessions have been summarised below.

2020-05-05

Updated November 2020

Click below to select a State or Territories update:

Australian Capital Territory

What relief is available?

  •  A six month waiver of payroll tax from April to September 2020 has been announced for employers operating in “prohibited business activity” who are directly impacted by COVID-19, including: 

    • Hospitality - cafes, pubs, clubs and restaurants

    • Residential facilities - hotels, apartments and hostels

    • Non-residential institutions - galleries, museums and community facilities

    • Beauty and personal care services

    • Entertainment venues

    • Creative arts industries

    • Leisure and recreation

    • Outdoor recreation.

  • For employers who lodge annually, the waiver will be applied to their annual return (due on 21 July 2020), calculated at 25% of the total tax payable and capped at $1,500

  • Construction sector businesses may defer payroll tax for nine months, interest free from April to December 2020

  • Businesses are exempt from paying payroll tax on wages subsidised by the Commonwealth JobKeeper payment scheme from 30 March 2020

  • All ACT businesses with Australia wide wages of less than $10 million can defer their 2020-2021 payroll tax interest free until 1 July 2022.

What is the eligibility criteria?

  • Businesses impacted by COVID-19 prohibited activities list

  • For deferral businesses with less than $10 million Australian taxable wages or construction industry.

Evidentiary requirements

Must show negative impact of COVID-19 in application

Timing for relief

  • Waiver from April to September 2020

  • Deferral to 1 July 2022

How to access the concession

Must complete payroll tax waiver application form and submit to revenue ACT.

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New South Wales

What relief is available?

  • Deferral of payroll tax for all businesses with payroll taxable wages exceeding $10 million for six months (Until October 2020). Impacted businesses will also be able to apply for a Payment plan.

  • Businesses with grouped Australian wages of $10 million or less will have their annual liability reduced by 25% when they lodge their annual reconciliation.

  • The next round of NSW payroll tax cuts will be brought forward by raising the threshold limit to $1m in 2020-21

  • Any additional wages paid to employees to meet the requirements of the Jobkeeper scheme are exempt from payroll tax. This means that where an employee is stood down, the full $1,500 payment would be exempt from payroll tax. In the case of employees whose earned salary is less than the amount of the JobKeeper payment, the difference between the $1,500 payment and the earned wage will be exempt from payroll tax.

  • Payroll Tax Stimulus Payment

    • 24 month stimulus payment arrangement commencing 26 October 2020

    • Allows for the inclusion of tax payable from 2020 annual reconciliation as well as any monthly liabilities for the July, August & September 2020 return periods.

  • Job Plus Program

    • Payroll tax relief available for up to four years for businesses in respect of every new job where a business has created 30 new net jobs.

  • NSW State Government Budget announcements

    • A temporary reduction in the payroll tax rate to 4.85% for the income years ending 30 June 2021 and 20 June 2022 

    • The payroll tax threshold will also increase to $1,200,000 from 1 July 2020

Both changes will apply retrospectively.

What is the eligibility criteria?

  •  25% discount applies only to business with taxable wages under $10 million

  • Payroll Tax Stimulus Payment:

    • Lodge 2019/2020 annual reconciliation  or;

    • Your payroll tax start date falls between 1 July 2020 & 30 September 2020.

  • Job Plus Program:

    • Available to any business that relocates their head office to NSW or expands their current job capacity within the state. Applies to both domestic and international businesses.

Evidentiary requirements

  • Must show that total Australian annual group wages are below $10 million

  • Payroll Tax Stimulus Payment is available from 26 October to 29 November 2020

  • Job Plus program commences 15 December 2020 and runs until 30 June 2022.

Timing for relief

 Payroll tax payments deferral to October 2020, annual liability concession from 1 July 2020.  Still required to lodge the 2019-20 annual reconciliation by the due date.

How to access the concession

 No registration required 

Other concessions if you don't meet the eligibility criteria

Optional 6 Month tax deferral for all other businesses.

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Northern Territory

What relief is available?

  •  The NT government has announced in the recent Budget that the Hiring Resident Employees payroll tax exemption has been given a 12 month extension to 30 June 2021

  • Payroll tax will be waived in respect of JobKeeper payments.

  • The Northern Territory Government has extended payroll tax waivers for the March 2020 to April 2021 return periods for employers with:

  1. Confirmed listing on the DTBI Central Hardship Register

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

  • The Northern Territory Government has also extended payroll tax deferrals for registered employers from 21 September 2020 to 21 May 2020 that meet the following conditions:

  1. Confirmed listing on the DTBI Central Hardship Register

  2. Estimated total Australian taxable wages for 2019-20 of over $7.5 million

  3. 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.

What is the eligibility criteria?

  •  Up to $7.5 million wages waiver

  • Over $7.5 million and impacted by COVID-19 can apply for deferral until 21 September

Evidentiary requirements

Must show that the business is directly or indirectly affected by COVID-19 if their current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected compared with normal operating conditions.

Timing for relief

  • Waiver from March to August

  • Deferral until 21 September.

How to access the concession

  • A business with an annual turnover of up to $50 million that can demonstrate a reduction in turnover of at least 30 per cent due to COVID-19 when compared to the same month or quarter in 2019 can apply to be included on the Central Hardship Register.

  • Inclusion on the Central Hardship Register is a prerequisite for payroll tax relief. More information about the Central Hardship Register and how to apply will be available from 1 May 2020. Once listed you will be contacted by the Territory Revenue Office.

Other concessions if you don't meet the eligibility criteria

  • The payment of the March return (usually due 21 April, has been extended to 15 May 2020.

  • Flexible payment plan options are available for impacted businesses.

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Queensland

Updated: 29 October 2020

What relief is available?

  • A 6 month deferral of payroll tax will be available to all impacted businesses with the option to agree to a repayment plan with the Queensland OSR at the end of the 6 month period

  • Coupled with this group employers with annual taxable Australian wages of less than $6.5 million can also obtain a refund of November and December 2019 payroll tax as well as a payroll tax holiday for three months (January to March 2020)

  • As part of newly implemented relief measures employers with annual taxable Australian wages of less than $6.5 million can now have their payroll tax waived for July and August 2020 payroll tax as well.

  • Immediate payroll tax refunds have been provided for COVID-19 affected businesses. Eligible businesses can also apply for deferral of payroll tax until the 2021 year, the exact date of deferral will depend upon the original returns lodgement due date. Businesses will have the option to agree to a repayment plan with the Queensland OSR at the end of the deferral period

  • For group employers with annual taxable Australian wages of greater than $6.5 million, where their businesses have been impacted by COVID-19 (eg reduced turnover, customers, profits etc) they will also be able to obtain a refund of two months payroll tax (January and February 2020) and have their deferral extended into 2021. All this means no Queensland business impacted by COVID-19 will have to make a payroll tax payment until 2021

  • The Australian Government JobKeeper payment is not subject to payroll tax in Queensland.

What is the eligibility criteria?

  • Employer that pays $6.5 million or less in Australian taxable wages eligible for refund and holiday

  • Over $6.5 million and have been negatively affect by COVID-19 can apply for deferral or refund for January and February 2020

  • Over $6.5 million and have been negatively affect by COVID-19 can apply for deferral of payment until 2021, the exact date of deferral will depend upon the original return lodgement due date.

Evidentiary requirements

Over $6.5 million must show that the business is directly or indirectly affected by COVID-19 if their current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected compared with normal operating conditions.

Timing for relief

Must apply for payroll tax refund/ holiday before by 31 December 2020.

How to access the concession

Must complete online application forms through OSRconnect to apply for payroll tax deferral and/or the refund and holiday.

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South Australia

What relief is available?

Up to $4 million wages

  • Business groups with annual Australian grouped wages of up to $4 million will get a 6 month waiver. Eligible groups will not be required to pay payroll tax for the months of April 2020 to June 2021 (for the return periods March 2020 to May 2021)

  • Monthly returns must still be lodged to capture the information

  • Waiver will be finalised as part of annual reconciliation process for 2019-20 and 2020-21

  • Annualised groups can elect to defer their payroll tax payments for March – November 2020 return periods until 14 January 2021

  • If any employee qualifies for JobKeeper support payments between January 2021 & 28 March 2021, employers will receive a payroll tax payable waiver on all declared wages from January to June 2021. (6 month waiver beginning 4 January 2021).

Over $4 million wages

  • If able to demonstrate significant impact by COVID-19 then the same 6 month deferral can be granted via an online application

  • Businesses whose employees qualify for the JobKeeper payments will be exempt from paying any payroll tax on the wage subsidy

SA Budget announcements

  • Job keeper payments are all exempt from payroll tax

  • There is no payroll tax for new Apprentices & Trainees for 12 months

  • Businesses with payroll exceeding $4 million can defer their payroll tax for 9 months.

What is the eligibility criteria?

  • Up to $4 million wages waiver

  • Over $4 million and impacted by COVID-19 can apply for deferral of up to 6 months.

Evidentiary requirements

Business groups with annual Australian grouped wages of up to $4 million will get a 6 month waiver (not required to pay payroll tax for the months of April to September).

Timing for relief

Payroll tax payments will be either waived or deferred until October 2020 depending on eligibility.

How to access the concession

  • No application required where business meet the under $4 million threshold in 208-19 FY, they will be notified through RevenueSA Online.

  • An online application is being developed for businesses over $4 million to apply for the payroll tax deferral.

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Tasmania

What relief is available?

  • Last 4 months of the income year ending 30 June 2020 will be waived for payroll tax paying businesses in the hospitality, tourism and seafood sectors.

  • Tasmanian businesses with Australian taxable wages of $5 million or less that have been impacted by COVID-19 will have the payroll tax for the last 3 months of the income year waived.

  • To encourage the employment of young people, a youth employment payroll tax rebate will be introduced from 1 April 2020.

  • JobKeeper Payments will be exempt from Tasmanian Payroll Tax

  • The Australian Government JobKeeper payment is not subject to payroll tax in Tasmania, these amounts should not be included in taxable wages

  • $22 million investment to boost jobs for youth employees, apprentices & trainees, includes:

    • Extending current payroll tax rebate (1 July 2019  to 30 June 2021) for trainees & apprentices for an additional 12 months

    • Extending current payroll tax rebate (1 April to 31 December 2020) for youth employees for an additional 18 months

    • The extension of both of these rebates to all industry sectors.

What is the eligibility criteria?

To be considered an eligible business at least one of the following conditions must be met:

  1. You are not grouped and only pay wages in Tasmania

  2. You are not grouped and the Tasmanian portion of your wages will be 50 per cent or more of your total Australian Wages

  3. You are grouped and the Tasmanian portion of the Australian Group Wages will be 50 per cent or more of the group’s Australian Group Wages; and you have been adversely impacted by COVID-19.

General Rebate Eligibility:

  • To be eligible for rebate in the same period businesses need to lodge their returns and  pay the payroll tax by the due date

  • Not have any unpaid payroll tax liabilities

  • Not be subject  to incomplete payroll tax investigations

  • Comply with compliance checks from the SRO, provide Commissioner of State Revenue with any information requested and/or repay a rebate payment received if requested

  • Comply with Payroll Tax Act 2008 & the Payroll Tax Rebate (Apprentices, Trainees and Youth Employees) Act 2017.

Youth Employee Eligibility:

  • Be between the ages of 15 & 24

  • Be employed within the 1 April to 31 December 2020 period

  • Not be an apprentice or trainee

  • Be employed on a full or part time basis. Casual employees will not qualify

  • Have not been employed or engaged by the employer on 31 March 2020 or previously within the specified eligible period above.

Apprentices & Trainees:

  • Must satisfy relevant definition and be employed under a training contract effected by the Training & Workforce Development Act 2013

  • Employer must be in the Manufacturing, Construction or Tourism & Hospitality Division industry

  • If within another Division not specified above, employee may still qualify for rebate in special circumstances.

Evidentiary requirements

Must show negative impact of COVID-19 in application.

Timing for relief

  • Waivers available to impacted businesses from March to May 2020, specific industries extends to June

  • Annual payroll tax reconciliations must still be lodged by 21 July 2020

  • Payroll Tax incentive extensions & Small Business Grant will commence on 1 January 2021.

How to access the concession

Must complete application form available of revenue office website and return to state revenue office.

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Victoria

What relief is available?

  • Small and medium-sized businesses with annual Australian Group wages of less than $3 million will have their payroll tax for the 2019-20 financial year waived.

  • These businesses can also defer paying payroll tax for the first quarter of the 2020-21 income year.

  • JobKeeper payments made to employees that have been stood down and the component of JobKeeper payments above a part-time employees usual salary will be exempt from payroll tax

  • Additional payments made by employers in order to bridge the gap between the $1,500 requirement to qualify for JobKeeper payments and an employee’s normal wage are exempt from payroll tax - this includes employees that have been stood down

  • Eligible businesses with payrolls of up to $10 million are able to defer their payroll tax liabilities for 2021 income year until the 2022 income year

  • The 2020-2021 payroll tax liabilities can be paid over four quarterly instalments during the 2022 income year.

Victorian State Government Budget announcements

  • New Jobs Tax Credit

    • Businesses with annual Australian group wages of less than $10 million will receive a credit of 10 cents for each dollar of Victorian wages paid in the income years ending 30 June 2021 and 30 June 2022 that is higher than the prior year’s wages

    • As a result, the more these businesses re-hire staff and employ new workers, the less payroll tax they'll have to pay

    • Special rules will apply for new businesses

  • The threshold for paying payroll tax annually will be increased from $40,000 to $100,000 from 1 July 2021.

What is the eligibility criteria?

  • Businesses with annual Victorian taxable wages up to $3 million

  • Employers with payrolls of up to $10 million must lodge their 2020 income year annual reconciliation return and July 2020 through to June 2021 monthly payroll tax returns.

Evidentiary requirements

Must show that total Australian annual group wages are below $3 million.

Timing for relief

Deferral to October 2020. Still required to lodge returns, but do not need to make further payments for this financial year.

  • July, August & September 2020 liabilities are due on 7 September 2021

  • October, November & December 2020 are due on 7 December 2021

  • January, February & March 2020 liabilities are due on 7 March 2022

  • April, May & June 2020 liabilities are due on 7 June 2022.

How to access the concession

Eligible businesses are required to claim a reimbursement of payroll tax already paid through PTX Express, these businesses will be contacted by the State Revenue Office.

Other concessions if you don't meet the eligibility criteria

Impacted businesses may be able to apply for deferral on the basis of hardship.

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Western Australia

Click here to view WA's Payroll Tax Employer Guide

What relief is available?

  • Payroll tax will be waived for March to June 2020 for employers who have Australian taxable wages of less than $7.5 million at 30 June 2020

  • JobKeeper Payment will be exempt from WA payroll tax

  • $1 million payroll tax threshold brought forward by six months to 1 July 2020

  • Wages paid by employers that are subsidised by the Australian Government’s JobKeeper Payment are exempt from payroll tax and should not be included as taxable wages

  • Employers may be eligible for one off grant payments of $17,500

  • Applications do not need to be submitted & cheques are issued automatically from 1 July 2020.

What is the eligibility criteria?

  • Businesses with Australian taxable wages up to $7.5 million for payroll tax waiver

  • Over $7.5 million and impacted by COVID-19 can apply for deferral of up to 6 months

  • Employers or groups of employers must have had Australian taxable wages of more than $1 million & less than $4 million during the 2019 income year.

Evidentiary requirements

  • Employers with less than $5 million in Australian taxable wages at 29 February 2020 will automatically have payroll tax waived

  • Payroll tax will be waived at annual reconciliation on Australian taxable wages that are less than $7.5 million.

Timing for relief

Waiver from March to June 2020.

How to access the concession

  • Employers with less than $5 million in wages at 29 February 2020 will automatically have payroll tax waived

  • Australian taxable wages $5 million or more at 29 February 2020, or new employers from 1 March 2020 can apply for deferral if they believe that their annual reconciliation will be under $7.5 million.

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Stephen O'Flynn

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