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WA Payroll Tax Changes 2020

WA Government delivers payroll tax relief for 12,000 small businesses.

Small businesses are set to be the big winners with changes to payroll tax announced by Western Australian Premier, Mark McGowan on 31 October 2019. The key initiative is an increase in the payroll tax threshold by $150,000 over the next two years.

Western Australia businesses with an annual payroll of up to $850,000 are currently exempt from paying payroll tax. Under the Government’s new measures, the threshold will increase to $950,000 from 1 January 2020 and to $1 million from 1 January 2021.

The result is an estimated 1,000 businesses will no longer be liable for payroll tax while another 11,000 will receive a reduction in their liability. The overall outcome is that approximately 70% of WA employers, currently paying payroll tax, will receive a benefit.

“This package will deliver real incentives for thousands of local businesses to hire additional staff, and is the latest in a series of measures announced to stimulate WA’s economy,” Premier McGowan said.

Peter Tobin, Tobin Partners, notes another significant outcome, that of greater consistency in payroll tax on a national basis.

“Payroll tax is a state-based tax and as such there are different thresholds and rates in each state, creating complications for businesses operating in several states,” Peter said.

“The changes in WA will bring it more in line with other states and provide greater simplicity in calculations for many businesses.”

In our 2018 article comparing payroll tax in each state, we described WA as ‘complex’ so any changes to simplify that system are welcome.

As a timely reminder – the penalties for miscalculating payroll tax are significant and when changes such are these are introduced, it can be risky not to consult with a specialist to discuss the impacts on your individual business.

To discuss how the Western Australia payroll tax changes may affect your business, speak with us at Tobin Partners, Lawyers by email or call 0438 001 809 for a confidential discussion on how to calculate payroll tax for your business.

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