Small businesses in NSW and SA are set to benefit from an increase to the payroll tax threshold, but more states need to follow suit, says one association body.
Payroll tax threshold to increase in NSW, SA
This week, the NSW state budget revealed that the payroll tax threshold would be increased from $750,000 to $1 million over the next four years.
The threshold will be progressively increased, starting with an increase to $850,000 for the year ending 30 June 2019, to $900,000 in 2019-20, $950,000 in 2020-21, before finally reaching $1 million in 2021-22.
Speaking to The Bookkeeper, Association of Accounting Technicians chief executive, Rochelle Park, said the announcement was welcome news for bookkeepers to deliver to their NSW-based clients.
“These measures are certainly a welcome relief to NSW businesses on what is a counterproductive tax in the first place. The increasing of the threshold and the reduction of administrative burdens of reporting the tax will improve the capacities of business to spend money on growth or increasing their workforce to improve productivity; this is clearly a win for the NSW economy,” said Ms Park.
“The NSW government budget proposal to increase the payroll tax threshold brings them more into line with Queensland, the Northern Territory and Tasmania, all of whom already have thresholds in excess of the $1 million mark.
“Other states should be encouraged to continue to follow suit and entice large employers not only to call their state home, but to also support thriving economies and a level playing field across the country.”
Likewise, bookkeepers in SA will have good news for their clients, with Premier Steven Marshall announcing a proposed new bill to raise the payroll tax threshold from $600,000 to $1.5 million.
The Payroll Tax (Exemption for Small Business) Amendment Bill 2018 being introduced in state parliament has an expected start date of 1 January 2019.
“At long last the economic handbrake is coming off small businesses in this state who will soon have more money in their pockets to reinvest into their operations to drive growth,’’ said Mr Marshall.
“Not only are we removing a major disincentive to businesses creating more jobs and employing more people, we’re making South Australia a much more attractive place in which to invest and grow.
“A further 400 businesses with payrolls between $1.5 million and $1.7 million will receive a welcome reduction in the amount of payroll tax they are required to pay through a phased-in approach.”