In response to COVID-19, the government economic stimulus announced an upgrade in payroll tax relief as follows:
- >$10m payroll – Payment deferral option of up to six months
- <$10m payroll – previously three month payment waiver (effectively providing a 25% reduction in payroll tax payable which will be reconciled when annual reconciliation is lodged), now provided with additional three month payment deferral
In detailed below and can be found here:
Payroll tax deferral arrangements for businesses with total grouped Australian wages over $10 million
Payroll tax customers whose total grouped Australian wages for the 2019/20 financial year are over $10 million, will have the option of deferring the payment of payroll tax for up to six months.
These businesses will not need to make their payment for the March period, normally due on 7 April 2020.
More information will be provided on the deferral arrangement in the upcoming days.
Payroll tax relief for businesses with grouped Australian wages of no more than $10 million
Payroll tax customers whose total grouped Australian wages for the 2019/20 financial year are no more than $10 million will have their annual tax liability reduced by 25% when they lodge their annual reconciliation, which is due on 28 July.
For those customers who lodge and pay monthly and whose total Australian wages will be no more than $10 million for the current financial year, no payment for the months of March, April or May 2020 will be required.
These customers will also have the option of deferring these payments for an additional three months and more information will be provided on the deferral arrangements in the upcoming days.
When lodging your annual reconciliation, you will still need to provide wage details paid in these months and will receive the benefit of a 25% reduction in the amount of tax you would have had to pay for 2019-20.
Answers to frequently asked questions can be found here.
Threshold increase – 2020/2021 financial year
The tax-free threshold will increase from $900,000 to $1 million for the financial year commencing on 1 July 2020.