From 1 January 2019, businesses with annual taxable Australia wide wages of up to $1.5 million are not required to pay payroll tax, and the payroll tax rate for taxable wages between $1.5 million and $1.7 million will be entitled to a reduced payroll tax rate.
For businesses grouped for payroll tax, the $1.5 million threshold should include total taxable wages of all group members.
Businesses required to pay payroll tax will continue to receive a deduction entitlement of up to $600,000, which is unchanged. If businesses with taxable Australia wide wages exceeding $1.5 million, payroll tax will be payable on taxable wages less any deduction entitlement up to a maximum of $600,000.
For businesses/groups with taxable Australia wide wages between $1.5 million and $1.7 million a variable rate from 0% to 4.95% will apply. Below is an updated payroll tax rate table from 1 January 2019.
|Annual Taxable Wages||FY 2018 -2019||FY 2019-20 onwards|
|July to December||January to June|
|$600 000 – $1.5 million||Variable 2.5% to 4.95%||0%||0%|
|$1.5 Million to $1.7 million||4.95%||Variable 0% to 4.95%||Variable 0% to 4.95%|
|Over $1.7 million||4.95%||4.95%||4.95%|
As these changes come into effect mid-way through, the 2018-19 financial year it will be split into two return periods as follow:
|Period 1||1 July 2018 to 31 December 2018|
|Period 2||1 January 2019 to 30 June 2019|
The 2018-19 Annual Reconciliation is required to be completed and lodged by 22 July 2019.
This communication is general in nature and current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Should you wish to discuss any matter raised in this article, please feel free to contact us.