The QLD Government 2019 State Budget introduces payroll tax reform package to support business.
Already boasting one of the most competitive payroll tax regimes in the country, Queensland is set to improve that situation with a $885m payroll tax reform package. In handing down the 2019/20 State Budget, Queensland Treasurer, Ms Jackie Trad, said the Palaszczuk Government is continuing to make job creation the number one priority by making payroll tax reform a cornerstone of the budget.
As specialist payroll tax lawyers, we are particularly interested in the payroll tax reforms in the budget, including a number of key elements which increase the threshold and reduce the rate for many businesses.
Increased Threshold
The tax payable by small businesses will be reduced as the payroll tax exemption threshold is increased from $1.1m to $1.3m. This represents a benefit to employers with an annual wages/payroll tax bill of up to $6.5m.
The Treasurer highlighted the significance of this reform by saying that a business in Queensland can employ twice as many people as a business in Victoria before paying one dollar in payroll tax.
Regional Relief
As many rural and regional businesses continue to suffer from the drought, the Government is delivering some relief in payroll tax with a 1% rate reduction to be introduced.
The 1% payroll tax discount will apply from 1 July 2019. It applies to employers with 85% of their employees working outside of South East Queensland.
“This is a great relief for regional businesses, but a complex issue in regard to where your employees are located,” Peter Tobin, Tobin Partners said. “This is exactly the type of issue which we strongly advise you contact us to review your individual scenario before automatically implementing the changes.”
Rebate for New and Trainee Employees
As an incentive for business to create jobs and take on new employees, a temporary rebate of up to $20,000 on payroll tax is being offered under the title ‘Employment Growth Rebate’.
Specifically, effective from 1 July 2019 and for two years, Queensland employers that have increased their number of full-time employees will be eligible. The rebate on payroll tax is for the payroll tax paid for these additional, new, employees, not the total payroll tax bill. The rebate is capped at $20,000 annually.
“This will involve paying close attention to detail when preparing your payroll tax and once again, consulting with us prior to preparing your return, is advisable because significant penalties apply to businesses which miscalculate their tax obligations,” Peter said.
In addition to the rebate for new employees, the 50% payroll tax rebate on the wages of apprentices and trainees will be continued until 30 June 2021. This is also applicable only to regional employees.
Increases for Some Businesses
While this news is good for some – over 13,000 small and medium businesses are expected to benefit from the increased threshold and rebates, there will be an increased payroll tax rate for those employers with taxable wages above the $6.5m
Time to Review Your Payroll Tax
With budget time coinciding with tax time, this is the ideal timeframe to review your overall payroll tax situation. We encourage you to contact us and speak with our payroll tax specialists so we can work with your to maximise the benefits of these new initiatives.
“Remember, the penalties for miscalculating payroll tax are significant,” Peter said, “It’s definitely not worth taking the risk of not consulting an expert when changes such as these are introduced.”
To discuss how the 2019 Queensland State Government Payroll Tax Reform Package effects 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.
