According to Victorian Chamber of Commerce and Industry chief executive Mark Stone, Victoria is trailing all other states and territories by implementing the dreaded tax on a staff wages threshold of $650,000.
Mr Stone said that all other states have, or will have from next year, thresholds of between $850,000 and $2 million.
However, Victoria has one of the lowest rates of payroll tax, which is split between 4.85 per cent for Melbourne businesses and 2.425 per cent for those in regional areas.
Only Queensland has a lower fixed rate, at 4.75 per cent, while the rate of payroll tax in Tasmania varies between 4 per cent and 6.1 per cent depending on the size of the business.
“Despite the efforts of the Andrews government, Victoria has fallen behind. If small businesses are to grow and create more job opportunities for Victorians, we need to increase the payroll tax threshold,” Mr Stone said.
“It doesn’t make sense to slap Victorian small businesses with a tax on jobs.”
He added: “We care about keeping Victorian business competitive and ensuring young Victorians have job opportunities to build a strong future. Victoria’s payroll tax is making it harder for business to hire more people.”
State and territory governments raked in $23.65 billion in payroll tax last financial year alone, according to estimates by The Tax Institute. Victoria had the second-biggest take, behind NSW, with $5.9 billion.