So far, South Australia, Western Australia, Tasmania, Queensland and the ACT have announced blanket exemptions from payroll tax liabilities for all JobKeeper payments under their COVID-19 stimulus measures.
Victoria has announced payroll tax relief for businesses participating in the JobKeeper scheme “if their staff are currently stood down” so businesses are not paying extra for staff who are not working.
The Victorian government has also stated that payments above a part-time employee’s usual salary to meet the minimum $1,500 will be exempt from payroll tax.
However, it did not say if businesses would see JobKeeper payroll tax relief for employees receiving the payments that have not been stood down.
Queensland announced this morning that they were extending their payroll tax measures to include an exemption for all JobKeeper payments.
Before that, Queensland had only announced a payroll tax “holiday” for between January and March 2020, coupled with an available payroll tax deferral for the 2020 calendar year.
While NSW and the Northern Territory have both announced payroll tax relief measures, they have not stated that JobKeeper payments will be exempt.
In NSW, all businesses have the option to defer their payroll tax arrangements until October 2020, but are still required to lodge the 2019/20 annual reconciliation by the due date.
Businesses in the Northern Territory will be able to defer payroll tax liabilities until 21 September if they have a confirmed listing on the state’s Department of Trade, Business and Innovation (DBTI) Hardship Register; an estimated total Australian taxable wages for 2019/20 of over $7.5 million; and a reduction in turnover of at least 50 per cent when compared to the corresponding month or quarter in 2019.
These interstate policy discrepancies have led to concerns that businesses in states where JobKeeper is not exempt from payroll tax will not apply for the wage subsidy to avoid paying payroll tax on employees that have been stood down.
In early April, the peak accounting bodies wrote to the national cabinet seeking clarification on the payroll tax treatment of JobKeeper payments.
In their letter, the joint bodies said, while the payroll tax deferral initiatives announced by each state were welcomed, there was an obvious need for uniform treatment of the JobKeeper payment for state payroll tax purposes.
“It is our view, like the announcement in South Australia, that all states should, as a matter of priority, make it clear that $1,500 per fortnight per employee JobKeeper payment is exempt from payroll tax,” the professional bodies said.
“To have inconsistent treatment across states would not only be inequitable but would add a layer of complexity to a process that is already presenting significant challenges for both the ATO and employers.”