On 28 June 2019 the Queensland Parliament passed the Revenue and Other Legislation Amendment Bill 2019.
Of particular interest will be the changes to Payroll Tax Act 1971 from 1 July 2019:
Payroll Tax Free Threshold
- Payroll Tax Free Threshold increased from $1.1m to $1.3m.
- Payroll Tax Free Threshold reduction phase out also increases from $5.5m to $6.5m.
The reduction rate of $1 for every $4 remains, but starts from $1.3m. Employers paying over $6.5m in group wages will have a NIL Payroll Tax Free Threshold.
Payroll Tax Rate Increase
- Payroll Tax Rate for Employers paying more than $6.5m in wages will increase from 4.75% to 4.95%.
Regional Employers
- Regional employers1, which includes the Wide Bay region :
- who pay 85% of total wages to employees who reside in the defined regions, and
- have an ABN registered business address in the defined regions
Will receive a 1% discount and pay 3.75% or 3.95% for those paying payroll above $6.5m.
Apprentice and Trainee Wages
- Extension to payroll tax rebate for apprentice and trainee wages:
This continues for a further two years to 30 June 2021. Those wages that qualify will continue to have a 50% Payroll Tax rebate applied.
Are you planning to increase your employees or employ young job seekers?
- Rebate of up to $20,000 for increasing the number of full time employees year on year, plus
- Rebate of up to $20,000 for employing eligible job seekers
Examples
Example 1 – below the new threshold
If your business’ total group wages are, say $1.2m, you will no longer be required to pay payroll tax.
Example 2 – above the new threshold
- If your total group wages are $1.5m your payroll tax liability decreases to $11,875 in FY 2020 from $23,750 in FY 2019.
- If a regional employer paying regional employees your payroll tax liability decreases to $9,375 in FY 2020 from $23,750 in FY 2019.
Example 3 – at or above $5.5m
- If your total group wages are $5.5m your payroll tax liability decreases to $249,375 in FY 2020 from $261,250 in FY 2019.
- If a regional employer paying regional employees your payroll tax liability decreases to $196,875 in FY 2020 from $261,250 in FY 2019.
Example 4 – at or above $6.5m
- If your total group wages are $6.5m your payroll tax liability increases to $321,750 in FY2020 from $308,750 in FY 2019.
- If a regional employer paying regional employees your payroll tax liability decreases to $256,750 from $308,750 in FY 2019.
Please note the above examples are purely illustrative and not to be considered tax advice.
Payroll tax can be very complex and the above doesn’t take into account any wages paid outside of Queensland nor does it consider the grouping provisions. Also remember that amounts caught for payroll tax purposes will include more than what may normally be considered "wages and salaries” in your business.
We're here to help.
If you have any questions about how this change impacts your business, you should get in contact Ulton for further tailored assistance.
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