With the release of the 2018-19 budgets for all Australian States and Territories, excluding South Australia, there have been several proposed and approved changes to payroll tax rates, thresholds, rebates and schemes. The Australian Capital Territory has not announced any recent changes to payroll tax.
New South Wales: Payroll tax threshold increases over the next four years
The State Revenue Legislation Amendment Bill 2018 introduces payroll tax threshold changes following the handing down of the NSW Budget 2018-19 on 19 June 2018. The Bill, which received assent on 27 June 2018, progressively increases the payroll tax threshold from $750,000 to $1 million by the 2021-22 income year.
The payroll tax threshold for NSW over the next four income years have been amended to:
Victoria: Further reduction in payroll tax rate for regional Victoria employers
The payroll tax rate for eligible regional employees in Victoria has been reduced (State Taxation Acts Amendment Act 2018) to 2.425% from 1 July 2018.
The payroll tax concession for regional Victorian employers was originally introduced following the Victorian Budget 2017-18 at a reduced payroll tax rate of 3.65%. The eligibility requirements were outlined in a previous article: ‘Victorian Payroll Tax changes for Regional Employers’. The State Revenue Office Victoria provides guidance on the concession, including the meaning of ‘regional Victoria’ for the purposes of the concession and a list of regional councils.
Queensland: Increased payroll tax rebate extended
The Queensland Budget 2018-19 confirmed the extension of the increased payroll tax rebate for apprentices and trainees until June 2019. The increased rebate of 50% commenced in the 2016-17 income year, doubling the previous rebate of 25%.
Western Australia: Introduction of tiered payroll tax scale and changes to payroll tax exemption for trainees
A tiered payroll tax scale has been introduced in Western Australia from 1 July 2018 and will operate over the next five years. The payroll tax rates for the next five income years can be found in the Pay-roll Tax Act 2002:
|Taxable Wages||Payroll Tax Rate|
|$100 million or less||5.5%|
|Between $100 million and $1.5 billion||6.0%|
|$1.5 billion or more||6.5%|
The Pay-roll Tax Assessment Amendment (Exemption for Trainees) Act 2018, which amends the Pay-roll Tax Assessment Act 2002, limits the payroll tax exemption for apprentices/trainees. In particular, note that the apprentice/trainee must be a relevant ‘apprentice’ or ‘trainee’, a relevant ‘new employee’, and the employee’s annualised full time equivalent income must be below a specified threshold. The changes apply retrospectively from 1 December 2017.
Tasmania: Three-year payroll tax exemption in regional Tasmania, two-year payroll tax rebate and reduced rate in payroll tax bracket
From 1 July 2018, the payroll tax rate for taxable wages between $1.25 million and $2.0 million will be reduced to 4% in Tasmania.
|Taxable Wages||Payroll Tax Rate|
|Less than $1.25 million||NIL|
|$1.25 million to $2 million||4.0%|
|More than $2 million||6.1%|
A two-year Payroll Tax Rebate Scheme commences from 1 July 2019. The scheme is available to building, construction, tourism, hospitality and manufacturing businesses that employ new apprentices and trainees. The changes extend the existing rebate scheme, which was due to end on 30 June 2019.
Businesses that relocate their business to Tasmania from interstate, and establish operations in regional Tasmania between 1 July 2018 and 30 June 2021, are eligible for a three-year payroll tax exemption. The State Revenue Office Tasmania provides guidance on the meaning of regional Tasmania and other eligibility criteria.
South Australia: Payroll tax exemption for small businesses and reduced rate in payroll tax bracket
The SA State Budget 2018-19 will be delivered late and is due to be handed down on 4 September 2018.
The Payroll Tax (Exemption for Small Business) Bill 2018 was introduced into Parliament on 20 June 2018. The amendments made by the Bill will make businesses with annual taxable wages less than $1.5 million exempt from payroll tax, and reduce the payroll tax rate for those with annual taxable wages between $1.5 million and $1.7 million.
Northern Territory: Local Employment Package
The 2018-19 Territory Budget introduced the ‘Local Employment Package’, which includes a payroll tax exemption for business that hire Northern Territory (NT) residents before 1 July 2020. The Commissioner has provided a guideline for hiring resident employees. To be eligible for the exemption, an employer must satisfy one of the following criteria:
- Increase the total number of NT resident employees of the employer by hiring a new NT resident employee;
- Relocate an existing employee, who is a non-NT resident employee, to the Northern Territory as their principal place of residence; or
- Replace a previous non-NT resident with a NT resident employee who performs the same role.
The exemption applies to wages paid to employees hired from 1 May 2018 who meet the criteria above.