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NSW Payroll Tax Update & Changes

In a statement released on 17 September 2020, Revenue NSW announced details in regard to payroll tax deferrals, increase in threshold and reduction in payroll tax liability for some businesses. These measures are part of the NSW Government’s economic support package.

Some of these measures were introduced earlier in the year and we see this announcement as a reminder and an update of a number of aspects of the relief measures.

Payroll Tax Deferral for All Businesses

  • Businesses have the option of deferring their payroll tax payments until October 2020 but all businesses are required to lodge their 2019/20 annual reconciliation by the due date.
  • Outstanding liabilities for 2019/20 financial year in addition to payments for the months of July, August and September 2020 will be deferred for payment in October 2020.
  • In October 2020, businesses have the option of either paying the outstanding liability in full or entering a payment instalment plan for after October 2020. Details on applying for the instalment plan are due to be released in late September 2020.

We will keep an eye out for the details on how to apply and post updates accordingly.

For Businesses with Grouped Australian Wages of $10m or less: Reduction of 25%

  • Businesses with total grouped Australian wages of $10m or less for 2019/20 financial year and are liable for payroll tax, will have the annual payroll tax liability reduced by 25%. This will occur when the annual reconciliation is lodged.
  • Businesses will need to provide the details of wages paid for the entire 2019/20 financial year when lodging the reconciliation.
  • The group details of all members of the group or have been a member during the 2019/20 financial year will need to be provided with the reconciliation.

Increased Threshold for 2020/21 Income Year

Commencing on 1 July 2020, the payroll tax-free threshold increased from $900,000 to $1 million for the 2020/21 financial year.

Revenue NSW has published responses to a number of FAQs which can be accessed at https://www.revenue.nsw.gov.au/news-media-releases/covid-19-tax-relief-measures/covid-19-coronavirus-and-payroll-tax

Peter Tobin, Tobin Partners Lawyers peter@tobin.net.au 0438 001 809

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