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Payroll Tax Waivers for Small-Med Businesses in response to COVID-19 and the economic crisis 2020

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Published 19th March 2020
A number of states have enacted payroll tax relief in light of the current economic crisis followed by the COVID-19 outbreak in Jan/Feb of 2020. Here is an update on these measures by state.

Victoria (announced this week) 23/3/20

The Victoria State Revenue Office (VIC SRO) has announced that businesses with annual taxable wages of up to $3million in the state of Victoria, will have their payroll tax for the 2019/2020 financial year waived.

  • Eligible businesses must continue to lodge their returns but will not be required to make payment.
  • VIC SRO will contact those who are eligible, about the payroll tax they have paid already in this financial year.
  • VIC SRO will begin to refund payroll tax from 27 March 2020.
  • It will provide businesses with up to $113,975 in cash, with most receiving about $23,000 – ABC News

Eligible businesses who pay less than $3m in taxable wages will also be able to defer paying payroll tax for the first quarter of the 2020/2021 financial year until 1 January 2021.

For members of a group, the eligibility threshold applies to each employer, so if any member of the group pays less than $3m in taxable wages, they will be eligible for the payroll tax relief.

New South Wales

Probably the most significant measure for small business is $450 million allocated to waive payroll tax for the next three months, or until the end of the financial year.

This will be available to payroll tax customers whose total grouped Australian wages for the 2019/20 financial year are no more than $10 million. Their annual tax liability will also be reduced by 25% when they lodge their annual reconciliation due on 28 July.

Waiver of April 2020, May 2020 and June 2020 payroll tax for businesses with payroll of up to $10 million per annum.

The waiver will be additional to other benefits laid out in the federal government’s stimulus.

While it is not currently clear, it is expected that the payroll tax exemptions will be applied automatically.

The government is also bringing the next round of payroll tax cuts forward, meaning the payroll tax threshold will rise to $1 million in the financial year 2020-21.

Queensland (updated as at 25/3/20)

The Queensland Government has updated their relief measures in response to the coronavirus pandemic, as of 24 March 2020.These now include:
  • Refunds of payroll tax for 2 months – must apply before 31 May 2020
  • Waiving of payroll tax liability for 3 months – must apply before 31 May 2020
  • Deferral of payroll tax
You may be eligible for the below if you are an employer, or part of a group of employers, who pays $6.5million or less in Australian taxable wages. The Office of State Revenue QLD (OSR QLD), will email you to advise if you can:
  • Claim a refund of payroll tax for the last 2 months
  • Have your payroll tax waived for 3 months
You will also be eligible to apply for a deferral of payroll tax for the 2020 calendar year i.e January 2020 to December 2020Employers, or employers part of a group, who pay more than $6.5million in Australian taxable wages and have been negatively affected by the coronavirus, can apply for:
  • A deferral of payroll tax for the 2020 calendar year
  • A refund of payroll tax for 2 months
You are considered directly or indirectly affected by the coronavirus if your current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected, compared with normal operating conditions. You can apply for the payroll tax holiday and deferral here. Once you have applied:
  • You do not need to pay your payroll tax liabilities that arise for the 2020 Calendar Year
  • You must continue to lodge your returns each month or lodgement period, with no payment required
  • You can resume paying returns at any time during the deferral period

Western Australia

  • Increase of the payroll tax threshold to $1 million from 1st July 2020, rather than on 1 January 2021 as originally proposed; an increase from the current threshold of $950,000.
  • Payroll tax-paying businesses with a payroll between $1 million and $4 million will receive a one-off grant of $17,500.
  • Small and medium-sized businesses affected by COVID-19 can now apply to defer payment of their 2019-20 payroll tax until 21st July 2020.

 

As we review these measures, we will be holding a webinar for our clients to understand how these relief measures can apply to your business.

Further state announcements are expected and will be added here as we are notified.