2021 COVID-19 Payroll tax Stimulus measures

Payroll tax relief during COVID-19

by Robyn Jacobson, CTA, Senior Advocate

   

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Payroll tax relief by state

NSW

  • 25% reduction in annual payroll tax liability for businesses, with total grouped Australian wages no higher than $10 million for the current financial year when the annual reconciliation is lodged in July 2020
  • No payment of payroll tax required in March, April and May 2020 for businesses that lodge and pay monthly with a total Australian payroll no higher than $10 million for the current financial year (the wage information for these months will still need to be provided in the annual reconciliation to receive the 25% reduction).
  • Tax-free threshold will increase from $900,000 to $1 million for the financial year from 1 July 2020

Find out more about NSW payroll tax relief.

Victoria

  • Payroll tax waived for the 2019-20 financial year for businesses with annual taxable wages up to $3 million. These businesses can also defer payroll tax for the first quarter of the 2020-21 financial year.
  • Where payments above the $1500 a fortnight JobKeeper payment are made to bridge the gap with an employees usual salary, they are exempt from payroll tax.
  • Eligible employers with payrolls up to $10 million can defer paying 2020-21 payroll tax until the 2021-22 financial year.

Find out more about Victoria Payroll tax relief.

Queensland

  • Employers with an Australian payroll of $6.5 million or less may be able to apply for a refund of payroll tax for 2 months, a payroll tax holiday for 3 months or a deferral of payroll tax for the 2020 calendar year
  • Employers with an Australian payroll of more than $6.5 million that are negatively affected (directly or indirectly) by coronavirus, can apply for a deferral of payroll tax for the 2020 calendar year or a refund of payroll tax for 2 months.

Find out more about Queensland payroll tax relief.

Western Australia

  • Employers with an Australian payroll of $7.5 million or less that are directly or indirectly affected by COVID-19 can apply to defer monthly or quarterly payments until 21 July 2020
  • Employers with an Australian payroll of more than $1 million and up to $4 million maybe eligible for a one-off grant of $17,500. Grants will automatically be paid by cheque from July.

Find out more about Western Australian payroll tax relief.

ACT

  • A one-off, 6 month payroll tax waiver from March to August 2020 for creative arts, entertainment and hospitality businesses (including cafes, pubs, hotels, clubs and restaurants)
  • Businesses with Australian wages of up to $10 million can defer payment of their 2020-21 payroll tax (interest-free) until 1 July 2022 (payroll tax returns will need to be lodged as normal)

Find out more about ACT payroll tax relief.

Northern Territory

  • Payroll tax exemption for hiring Territory employees has been extended to 30 June 2021

Find out more about the Northern Territory response to COVID-19.

Tasmania

  • Hospitality, tourism, and seafood businesses will not be required to lodge payroll tax returns for March, April and May 2020 (Annual Adjustment Return for 2019-20 is still required)
  • Employers with an Australian payroll of up to $5 million annually, who can prove they are affected by COVID-19 will not be required to lodge payroll tax returns for March, April and May 2020 (Annual Adjustment Return for 2019-20 is still required)
  • Employers who pay payroll tax and employ new youth employees aged 24 years and under between 1 April 2020 and 31 December 2020 are eligible for a one year payroll tax rebate.

Find out more about Tasmanian payroll tax relief.

South Australia

  • No payroll tax measures announced to date.

Find out more about South Australia’s payroll tax.

Keep an eye on The Tax Institute’s website for online webinars relating to payroll tax measures including our upcoming session on the Commissioner of State Revenue v The Optical Superstore Pty Ltd decision and its implications for the payroll tax obligations of medical and health practices.

Advocacy on your behalf

One of the important things we do at The Tax Institute is to advocate for our members and the entire tax profession, by working with lawmakers, the Federal Treasury and the ATO. With the Australian government putting measures in place to address the economic fallout of COVID-19, this has never been more important.

Here’s what we’ve advocated for on your behalf: