Businesses will save about $10 million a year and have their paperwork burden eased under changes to be introduced following the NSW Productivity Commissioner’s review into payroll tax administration.
Business owners will save on average about 16 hours of work a year under the streamlined payroll tax system.
The NSW Government on 21 November 2018 announced that it would be implementing all 12 recommendations handed down by the NSW Productivity Commission’s report.
From next year, payroll tax administration will be streamlined with the introduction of equal automated payments making payroll tax a set-and-forget affair.
Productivity Commissioner Peter Achterstraat said he had listened to businesses.
“I am delighted that all the recommendations are being implemented and that businesses across our State will benefit from our reforms,” he said.
“This is just the start of what I want to do to support businesses in NSW.”
From July 2019, around 11,000 small businesses with a payroll tax liability under $20,000 will have the option of paying their payroll tax just once a year, with a single annual return.
Under the current system, all businesses need to submit a monthly return and make a monthly payment.
Businesses with a liability under $150,000 will be able to submit just one annual return and make pre-set monthly instalment payments, based on the previous year’s liability.
The reform follows the budget announcement in June 2018 that the payroll tax threshold would be lifted from $750,000 in 2017-18 to $1 million by 2021-22.
By 2021-22, approximately 5,000 firms that would have paid payroll tax will be exempt, avoiding both the tax itself and the administrative costs of complying with the payroll tax system.
For additional information, please see the media release.
Last updated: 22/11/2018