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NSW flags payroll tax relief and tendering support in budget

Adrian Flores
Adrian Flores
16 November 2020 2 minute readShare
NSW flags payroll tax relief and tendering support in budget

The NSW government will increase its payroll tax threshold as well as provide further support for tender submissions and government contract negotiations as part of new initiatives for local and small businesses to be announced in its upcoming budget.

The payroll tax threshold will increase to $1.2 million as part of the NSW budget to be delivered on Tuesday, 17 November. The current threshold is at $1 million until 30 June 2021, and the current payroll tax rate is 5.45 per cent.

Business NSW chief executive Nola Watson welcomed the decision after including the measure in its pre-budget submission to the NSW government.


“Payroll tax is a tax on jobs and serves as a disincentive for businesses to take on extra staff,” Ms Watson said.

“At a time when global economies are reeling, any support mechanisms to encourage business owners to invest by taking on additional staff should not be penalised through payroll tax.


“Both the Premier and Treasurer have promised this budget will focus on jobs, and it is good to see those words supported by decisive action.”

Government tender support for small businesses

The NSW government has also allocated $5 million to establish a tendering support service, to be delivered by the NSW Small Business Commission as a four-year program to assist small and local businesses.

Further, it also announced the extension of its Business Connect program for a further three years after 2020–21, enabling businesses to access independent business advice to build their capability to supply goods and services to government. The four-year commitment from 2020–21 will come at a cost of $39.3 million.



Minister for Finance and Small Business Damien Tudehope said the program would also support smaller, regional suppliers to tender for and access government contracts.

“The NSW government spends more than $40 billion each year on the procurement of goods, services and construction, with nearly half of that amount going to small and medium businesses,” Mr Tudehope said.

“However, many small businesses are not aware of the opportunities that exist or are unfamiliar with the NSW government tendering processes. They will benefit from additional guidance and support.

“Small businesses make up 97.5 per cent of businesses in NSW and by generating more work for local and small businesses through existing government spending, we will support jobs, families and local communities.”

NSW Small Business Commissioner Chris Lamont said the Small Business Commission would develop targeted information and support to assist small businesses put their best proposals forward.

“For some small and medium enterprises, it’s hard to know where to start; this measure will provide practical support and assistance,” Mr Lamont said.

Mr Tudehope also said the program aligns with its existing SME and Regional Procurement Policy, requiring government agencies to first consider buying goods and services from an SME for all direct procurements up to $250,000.

“The policy’s small business exemption allows government departments to buy directly from small businesses for any purchases up to $50,000 even if there is a mandated whole-of-government contract in place,” he said.

NSW flags payroll tax relief and tendering support in budget
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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