The Illawarra Business Chamber has called on the NSW Government to reduce the burden of payroll tax, which is among th ehighest in the nation and is holding back the small-to-medium enterprises tht employ workers from the Illawarra.

The call has been made off the back of the NSW Business Chamber’s submission to a NSW Parliamentary Inquiry into Zonal Taxation proposing a threshold of at least $1 million, which it estimates will reduce administration costs by around $10,000 per business that falls beneath that threshold and no longer has to register for payroll tax.

Currently, businesses in NSW incur a payroll tax liability once their payrolls exceed $750,000. NSW has the third lowest threshold in the country, with ACT having increased it to $2 million and in Queensland, the threshold is $1.1 million.

At present, there are some 7,900 businesses in the Illawarra that employ up to 200 people.  Over 20% or some 1,840 businesses have 5-19 employees.  Many of these enterprises would benefit from an increase in the threshold.

Illawarra Business Chamber Executive Director Adam Zarth said that in order to maintain the state’s competitiveness, the NSW Government needs to ease the burden of payroll tax on small-to-medium enterprises in the June state budget.

“Payroll tax is a handbrake on many of the small-to-medium enterprises of the Illawarra, who employ around 70 percent of our workforce.  It also impacts on those businesses that need to continually monitor their potential payroll tax liability,” said Mr Zarth.

“Our proposal is for an increase in the payroll tax threshold to a minimum of $1 million to ensure NSW remains competitive.

“The Illawarra, like much of regional NSW, has a higher relative share of businesses just over the current payroll tax threshold, and these are mum and dad businesses that shouldn’t be caught up in the complication of processing payroll tax or be penalised for hiring more staff and expanding their business.

“This is a responsible measure. We believe that increasing the threshold is a sensible step to improve the operating environment for business without negatively impacting the NSW Budget.”

Please find a link to the NSW Business Chamber’s submission to the Inquiry into Zonal Taxation at:

Media Contact:

Sharon Wingate Executive Assistant, Illawarra Business Chamber T: 02 4223 0303