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State Budget: NSW Payroll Tax Relief

Due to COVID-19 the state and territories have delayed bringing down their annual budgets in line with the decision made in regard to the Federal Budget. So in November rather than May we see the annual NSW budget with a major focus on post-COVID-19 recovery and business support.

In bringing down the budget, Treasurer Dominic Perrottet expanded on a number of measures around payroll tax which were announced earlier in the year. In May, the scheduled increase in the payroll tax threshold to $1 million was brought forward by one year.

  • The budget further increases that threshold to a payroll tax-free level of $1.2 million effective 1 July 2020. It is estimated that around 3,500 businesses will be no be subject to payroll tax.
  • In addition, for two years from 1 July 2020, the payroll tax rate will be reduced from 5.45% to 4.85%, representing a saving of around $2.4 billion to businesses in the relevant fiscal years.

Land tax relief has also been extended for eligible landowners from 1 January 2021 to 28 March 2021.

The NSW Budget raised a lot of attention as the Treasurer announced the Government’s plan to restructure the property tax landscape. The concept involves giving buyers the choice of either paying the existing stamp duty or opting for an annual property tax. The objective being to reduce the upfront costs of home ownership.

The Government will commence a consultation process in regards to these tax reforms and we will stay across developments in that space.

If you would like to discuss your payroll tax situation, please contact me either via email or phone.

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

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