The Illawarra Business Chamber has welcomed today’s commencement of the NSW Government’s new payroll tax regime, which was announced in the June state budget in response to a concerted campaign by the business chamber movement.
From today, small businesses will begin to benefit from a lift to the payroll tax threshold from $750,000 to $850,000, following the decision to lift the payroll tax threshold to
$1 million incrementally over the forward estimates.
“As of today, NSW businesses are benefiting from reduced payroll tax payments with the threshold lifted from $750,000 to $850,000, and will rise by a further $50,000 a year for the next three years,” said Adam Zarth, Executive Director of the Illawarra Business Chamber.
“This will provide immediate relief for businesses with payroll expenses around this mark, giving them breathing space and capacity to grow,” said Mr Zarth.
However the Illawarra Business Chamber is also urging the government to continue to look at what more it can do to ease the burden of payroll tax and related administration on small-to-medium enterprise.
“Based on feedback from our members, we estimate the costs of administering payroll tax to be around $10,000 as businesses cross the payroll tax threshold. A number of our members report that payroll tax administration can consume up to one third of an employee’s time, pending the size and complexity of a businesses’ payroll,” said Mr Zarth.
Further measures to reduce the administrative burden of payroll tax administration were proposed to government in the NSW Business Chamber’s July submission to the NSW Treasury Review of Payroll Tax Administration
In summary, the submission proposes that the government:
- Reduce red tape, which sees small employers required to calculate and report their payrolls (which can be disproportionate relative to their tax liability),
- Consider how reporting arrangements for other tax or policy purposes can be leveraged to reduce payroll tax reporting requirements for employers,
- Identify a more strategic and/or consistent approach to ensure audits are less cumbersome and proportionate to an employer’s payroll tax liability, and
- Improve guidance for employers to make it easier to access and appropriate to the needs of differentiated users.
“There is still room for further efficiencies when it comes to payroll tax, and we will continue to push for these,” said Mr Zarth.
James Newton 0417 135 858
A copy of the NSWBC submission to the NSW Treasury Review of Payroll Tax Administration
is available here