Australian States, Territories Announce Payroll Tax Changes

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By Jared Mondschein

June 27—A number of Australian states and the Australian Capital Territory proposed updates to payroll tax related thresholds, exemptions and rebates for the 2016-17 tax year, which begins on July 1, 2016, and ends June 30, 2017.

In addition to the changes occurring on a national level, regions with upcoming changes include:

• Australian Capital Territory—The payroll tax threshold would increase to A$2 million ($1.49 million) from A$1.85 million ($1.38 million) July 1, 2016, though the payroll tax rate of 6.85 percent would remain unchanged.

• New South Wales—The Job Action Plan, in which the New South Wales government provides a payroll tax rebate to businesses that employ new workers, would be altered. New jobs would only be eligible for the rebate if the number of full time employees is 50 or less on or after July 31, 2016. In addition, the total rebate amount per job would increase to A$6,000 ($4,477) from A$5,000 ($3,731). Employers of new jobs commencing on or after July 31, 2016, would receive a rebate of A$2,000 ($1,492) on the first anniversary and A$4,000 ($2,985) on the second anniversary.

•Victoria—The payroll tax threshold would increase to A$575,000 ($429,117) from A$550,000 ($410,460) on July 1, 2016, and continue to increase by A$25,000 ($18,657) on July 1 every year through 2019. The threshold would then increase to A$600,000 ($447,774) on July 1, 2017, A$625,000 ($466,431) on July 1, 2018, and A$650,000 ($485,089) on July 1, 2019. There are no proposed changes to the payroll tax rate of 4.85 percent.

• Western Australia—The payroll tax threshold would increase to A$850,000 ($634,347) from A$800,000 ($597,032) July 1, 2016, though the payroll tax rate of 5.5 percent would remain unchanged.

• South Australia—The Small Business Tax Rebate, which provides payroll tax savings for employers with taxable payrolls of A$1.2 million ($895,548) and less, would be extended to the 2019-2020 tax year, the South Australia state government said June 20. The rebate would allow employers to each receive up to A$9,800 ($7,313) in 2016-2017.

The proposed changes to payroll taxes are subject to approval by their respective legislatures.

To contact the reporter on this story: Jared Mondschein at jmondschein@bna.com

To contact the editor responsible for this story: Michael Baer at mbaer@bna.com

For More Information

The New South Wales budget is available at http://www.budget.nsw.gov.au/

The Australian Capital Territory budget is available at http://apps.treasury.act.gov.au/budget

The Victoria budget is available at: http://www.dtf.vic.gov.au/State-Budget .

The Western Australia budget is available at: http://www.ourstatebudget.wa.gov.au/ .

The South Australia government announcement on the extension of the Small Business Tax Rebate is available at http://www.premier.sa.gov.au/index.php/tom-koutsantonis-news-releases/725-state-budget-2016-17-payroll-tax-rebate-extended-for-four-years.

More information on payroll issues in Australia can be found in the Australia country primer.

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