There are many wonderful things about doing business in New South Wales. First and foremost, NSW has the largest economy of any Australian state, contributing over 30 percent of the national GDP. This thriving economy presents huge opportunities for aspiring entrepreneurs and veteran business magnates alike. Unfortunately, there are drawbacks to doing business in NSW as well. One of the biggest of those drawbacks is the NSW payroll tax.
What You Need to Know about the NSW Payroll Tax
NSW is not the only state in Australia with a payroll tax. Every Australian state has its own payroll tax laws, including different rates and different thresholds at which those rates kick into play.
What NSW does have is one of the lowest annual thresholds for payroll tax. In NSW, all businesses with gross yearly taxable wages that exceed $850,000 must pay payroll tax. Only one state has a lower threshold: Victoria, where payroll taxation starts at $650,000 in taxable annual wages. Western Australia also has payroll tax that kicks in at $850,000. The rest of the country has thresholds of $1 million or more. In the ACT, businesses don’t even start paying payroll taxes until their gross annual wages exceed $2 million.
For businesses that are above the payroll tax threshold, NSW enforces a payroll tax rate of 5.45 percent. You must pay this tax on top of all the others taxes your business is already paying on an annual basis—from property taxes to income taxes and beyond. Say your company is paying out $1 million in taxable wages each year. In this situation, you already owe an estimated $8,175. For large or growing businesses, this tax can end up being a sizable burden—and can actively discourage hiring new people or creating new jobs.
How Tobin Partners and Our NSW Tax lawyers Can Help Your Business
At Tobin Partners, we want to help your business grow and thrive. Too often, payroll tax acts as a barrier to this kind of growth. While government officials talk a lot about ‘creating jobs’ and ‘growing the economy,’ the payroll tax laws as written act too often as enemies of this progress.
For businesses of a certain size, that pay well above the payroll tax threshold, there is no real way to ‘avoid’ paying these taxes. However, especially for small and mid-sized businesses, there may be steps you can take to keep your business below the threshold without impeding your company’s ability to grow. Even large businesses may be overlooking opportunities to lower their tax burden.
Tobin Partners and our NSW tax lawyers are here to help you find and implement these strategies for reducing your tax burden. From restructuring your business to de-grouping businesses that are usually grouped for payroll tax purposes, all the way to litigation pathways, we can help you explore multiple options. We seek to learn as much as we can about your business and your current structure and tax status, so that we can offer you the best NSW payroll tax advice.
Are you interested in learning more about our strategies for reducing your tax burden? Contact Tobin Partners today to get your NSW payroll tax advice.