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NSW Payroll Tax Reforms

NSW Payroll Tax Reforms

26 August 2013

The NSW 2013-14 Budget handed down in mid-June by the O’Farrell government included a welcome announcement for business owners in relation to payroll tax reforms. 

Effective 1 July 2013 the payroll tax threshold for business increased from $689,000 to $750,000. The government believes this one-off threshold increase will benefit as many as 1,300 business owners who will no longer be liable to pay payroll tax. 

Businesses may also benefit from the government’s announcement in relation to the Jobs Action Plan. 

This program, designed to give businesses an incentive to employ new workers, has been extended until June 2015 with an increased payroll tax rebate of $5,000 for new jobs created since 1 July 2013. 

The rebate applies to the employment of an additional employee in a new job, and is paid in two parts: 

  • $2,000 will be paid at the end of the first year of employment; and
  • $3,000 will be paid at the end of the second year of employment 

Forty per cent of the new jobs will be prioritised for non-metropolitan areas of NSW, with the remaining sixty per cent in metropolitan areas. 

To be eligible, employers are required to register the employment of a person in a position that is a new job with the NSW Office of State Revenue and advise the number of NSW full-time equivalent (FTE) employees immediately before the position was filled. For part-time employees, the rebate will be pro-rated based on NSW FTE hours of employment. 

Registration of the new position must be made: 

  • By an employer who is registered and paying payroll tax in NSW
  • Within 30 days after the employment to which the application relates first commences. 

For more information about NSW payroll tax or the Jobs Action Plan, please speak to your Boyce Accountant or visit the Office of State Revenue website at www.osr.nsw.gov.au

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