The new financial year has brought with it changes to NSW Payroll tax. It is important that you are aware of these changes and how they might impact on your business. Payroll tax is imposed on an employer’s liable NSW wages minus any threshold entitlement. An individual employer or a group of related businesses may be liable for payroll tax if the total liable wages throughout Australia, including NSW, exceeds the payroll tax threshold for that year. The amount of tax that is payable varies and is determined on a state by state basis.
Recent changes to payroll tax
Payroll Tax Rebate Scheme (Jobs Action Plan) – One of the key priorities of the NSW Government is the Jobs Action Plan. This plan will assist in the creation of 100,000 new jobs in NSW from 1 July 2011.
Commonwealth Paid Parental Leave Scheme – The new Commonwealth Paid Parental Leave Scheme began on 1 January 2011. Any payments made under the scheme to eligible employees are NOT liable for NSW payroll tax.
NSW threshold and rates 2011–12
From 1 July 2011 to 30 June 2012 the annual payroll tax threshold is $678,000.
From 1 July 2011, the monthly threshold is:
• 29 days = $53,721
• 30 days = $55,574
• 31 days = $57,426
From 1 July 2011 the payroll tax rate is 5.45%.
What makes up ‘wages’ in calculating Payroll Tax?
For payroll tax purposes, the term ‘wages’ means any wages, remuneration, salary, commissions, bonuses, or allowances paid or payable (whether at piece work rates or otherwise and whether paid or payable in cash or in kind) to an employee.
Wages, remuneration and salary include any ordinary earnings, penalty rates, overtime and leave payments in relation to the provision of services to an employer.
The term wages also includes:
• payments for labour under certain contracts (i.e. some contractor payments)
• apprentice and trainee wages
• directors’ fees
• payments under an employment agency contract to a service provider
• grants of shares or options
• fringe benefits
• termination payments
• superannuation benefits.
When are payroll tax payments due?
Each monthly payment or ‘nil’ remittance is due seven days after the end of each month (ie August payment is due by 7 September) or the next business day if the seventh day is a weekend or public holiday. The annual reconciliation and payment, if applicable, is due by 21 July.
Here at The Quinn Group our experienced team of accountants can help you with your business’ Payroll Tax issues as well as any other accounting queries. For more information submit an online enquiry. If you have received an OSR audit or questionnaire it is vital that you seek professional advice because it is important that all questions be answered accurately. Call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.