The Jobs Action Plan targets the creation of 100,000 new jobs in NSW from July 2011 and gives businesses the incentive to employ new workers and expand their enterprises. The plan provides a payroll tax rebate of up to $4000 per employee for the first 100,000 new payroll tax paying jobs created in NSW on or after 1 July 2011. 40,000 of the new jobs will be prioritised for non-metropolitan areas of NSW with the remaining 60,000 in metropolitan areas. Businesses that increase their employment levels will receive a payroll tax rebate following the employment of each additional employee in a position that is a new job.
To be eligible for the rebate scheme, you must be registered as an employer and paying payroll tax under the Payroll Tax Act 2007. The rebate will be paid in two equal parts, on the first and second anniversary of the employment of an additional employee in a new job.
Eligible locations
Metropolitan area – being the area constituted by the following Local Government Areas:
- Ashfield, Auburn, Bankstown, Blacktown, Blue Mountains, Botany Bay, Burwood, Camden, Campbelltown, Canada Bay, Canterbury, Fairfield, Gosford, Hawkesbury, Holroyd, Hornsby, Hunters Hill, Hurstville, Kogarah, Ku-ring-gai, Lane Cove, Leichhardt, Liverpool, Manly, Marrickville, Mosman, North Sydney, Parramatta, Penrith, Pittwater, Randwick, Rockdale, Ryde, Strathfield, Sutherland Shire, Sydney, The Hills Shire, Warringah, Waverley, Willoughby, Wollondilly, Woollahra, Wyong,
- Newcastle,
- Wollongong.
The non-metropolitan area is made up of the rest of the State that does not fall within the metropolitan areas above. The new jobs found in these areas will be prioritised before the metropolitan areas.
Eligible employment
Employment is eligible employment if:
- a person is employed (full-time or part-time) in a position that is a new job, and
- the employment commences on or after 1 July 2011, and
- the employment is maintained for a period of at least two years, and
- the services of the employee are performed wholly or mainly in NSW, and
- the employment is not excluded from the rebate scheme.
New job
A position is a new job if the employment of a person in that position results in a sustained increase in the employer’s FTE employees. This increase must be sustained on both the first and second anniversaries of the date the employment commenced and throughout the 2 years. If the FTE falls below the FTE required for the payment of the rebate for more than 30 days any time during the year, the Chief Commissioner may refuse to pay the rebate.
Calculation of the number of full time equivalent (FTE) employees
The number of FTE employees of an employer on the date of appointment of a new employee (excluding the new employee) and on the first and second anniversary of a new employee’s appointment (including the new employee) is the sum of F + A/B where:
- F = the number of full time employees on that date
- A = the total number of hours worked in the preceding pay period by all part time employees employed on that date;
- B = the average number of hours worked in the preceding pay period by all full time employees employed on that date.
The Chief Commissioner may agree to a different or compromise method of calculating the number of FTE employees if it is too difficult or costly to determine the exact figures.
Minimum employment period
The minimum employment period is 2 years starting on the date the employment concerned is claimed to commence. Employment is maintained if there is always a person employed in the position for which the rebate is claimed. A vacancy in a position can be disregarded if the number of days vacant does not exceed a total of 30 days in each year of employment for which the rebate is claimed. The rebate may be paid if the 30 days are exceeded but only if the Chief Commissioner is satisfied the length of the vacancy is beyond the employer’s control. In this case the rebate will be paid on a pro-rata basis.
Excluded employment
The employment of a person by an employer is excluded from the rebate scheme if:
- the person was employed by the employer claiming the rebate or a group member in the previous 12 months, or
- the person’s employment is a continuation of employment with another employer, or
- any wages paid by the employer to the person are not taxable wages (i.e. the wages must be subject to NSW payroll tax under the nexus provisions), or
- any wages paid by the employer to the person are not taxable wages (i.e. the wages must be subject to NSW payroll tax under the nexus provisions), or
- the employer is entitled to a rebate under the Payroll Tax Act 2007 (i.e. apprentice/trainee rebate), or
- a rebate, subsidy or other assistance is payable to the employer for the employment of the person by the State, or
- the employer is taken to be the employer of the person under the contracting provisions or employment agency provisions of the Payroll Tax Act 2007, or
- the employer is the Crown in right of New South Wales or in any of its other capacities, or
- the employer is a public, local or municipal body or authority.
A person’s employment with an employer (the new employer) is a continuation of employment with another employer (the previous employer) if:
- the person was, within 12 months before the date on which the person commenced employment with the new employer, employed by the previous employer in a business or undertaking, and
- that business or undertaking has been the subject of a merger with the business or undertaking of the new employer or has been taken over or otherwise acquired by the new employer.
Registering for the scheme
Employers are required to register the employment of a person in a position that is a new job and advise the number of FTE employees immediately before the position was filled.
Registration may be made:
- by an employer who is registered and paying payroll tax
- between 1 July 2011 and 30 June 2013
- within 30 days after the employment to which the application relates first commences.
Here at The Quinn Group our experienced team can assist you in registering for and claiming the Payroll Tax Rebate Scheme. For more information about the Jobs Actions Plan submit an online enquiry to our experienced accountants and tax agents. To book an appointment or for any other business tax issues call us on 1300 QUINNS (784 667) or on +61 2 9223 9166.
