If you operate business in NSW, then you may be about to receive a boost to your bottom line, courtesy of the NSW State Government.
A key element of the 2018 Budget handed down in June, the NSW Government will be lifting the payroll tax threshold, the point at which businesses are subject to payroll tax, in progressive changes over the next 4 years.
The current threshold is $750,000 and that will rise to $850,000 in 2018-19, to $900,000 in 2019-20, further to $950,000 in 2020-21 and then to $1million in the 2021-22 financial year.
The changes will be bring relief to an estimated 40,000 NSW businesses with the Government estimating savings of up to $5,450 for each business in 2018-19 and increasing to $13,625 each in the 2021-22 period.
“Businesses that consistently have payrolls over $1 million, will save more than $120,000 over the next decade from the lifting of the payroll tax threshold, which is money that can be reinvested back into their business,” NSW Treasurer Dominic Perrottet said.
The changes to payroll tax are part of the NSW Government’s Small Business Strategy, which was announced 12 months ago and Minister for Small Business, John Barilaro said it would take immediate pressure off businesses which are looking to grow and expand their workforce.
Further Benefits Possible
In addition to the changes in the payroll tax thresholds, businesses may also be in line for reductions in other associated costs with the NSW Government announcing a Review of Payroll Tax Administration. The purpose being to reduce the administrative burden on business.
“This will be welcomed by many businesses including our own clients, but we continue to stress, that payroll tax is a complex tax and much misunderstood,” Peter Tobin, Managing Partner of Tobin Partners Lawyers said.
Peter explained that payroll tax is a state-based tax with different rates for each state and while described as a ‘self-assessed’ tax, many businesses make critical errors when attempting to administer their payroll tax themselves. We recommend you read our article on the pitfalls of self-assessment.
“We definitely welcome this change and strongly advise NSW businesses to contact us to discuss how these changes will benefit their business with a full assessment of their payroll tax obligations,” Peter Tobin said.
These changes only apply to businesses operating and paying employees in NSW. Other states have also implemented changes to payroll tax so please read our blog article which is relevant to your state.
Large financial penalties apply to businesses that incorrectly calculate and submit payroll tax and to those that simply ignore it altogether. Don’t put your business in that position, contact Tobin Partners for a discussion today. We have offices in Brisbane and Sydney but handle payroll tax matters for business across Australia.
To discuss how the NSW State Government changes to Payroll Tax effect your business, speak with us at Tobin Partners, Lawyers by email or call Peter Tobin 0438 001 809 for a confidential discussion on how to calculate payroll tax for your business.
