The NSW 2013-14 Budget was handed down by the O’Farrell government last week, and with it came the welcome announcement of payroll tax reforms that will benefit SME business owners in the state.
Following the lead of the South Australian government, which recently reduced the payroll tax burden for businesses in that state by cutting in half the payroll tax on payrolls up to $1 million for a period of two years, the NSW government has raised the payroll tax threshold for business from $689,000 to $750,000, effective July 1, 2013.
Businesses may be liable for payroll tax if their total liable wages exceeds the payroll tax threshold for that year. As well as increasing the efficiency of payroll tax, this one-off threshold increase will automatically save business owners into the thousands, with as many as 1,300 business owners no longer being liable to pay payroll tax.
In this budget the NSW government has also extended its Jobs Action Plan scheme to June 30 2015 while at the same time increasing the rebate from $4,000 to $5,000 for new jobs created after July 1 of this year. The rebate applies to the employment of an additional employee in a new job and will be paid in two parts – $2,000 at the end of the first year of employment, with the remaining $3,000 to be paid at the end of the second year of employment. For part-time employees, the rebate will be pro-rated based on full-time equivalent hours of employment.
“As the engine room of our economy, this Budget also provides support for small businesses to stimulate growth and jobs,” NSW Treasurer Mike Baird said in handing down the budget. “Payroll tax changes will provide tax relief to thousands of businesses, encouraging them to hire more people, while making payroll tax more efficient over the longer term. As an added measure to boost jobs, the NSW Government will also extend and increase the payroll tax rebate available under the Jobs Action Plan.”
While it’s often easy for business owners to treat any government announcement with token cynicism, these payroll tax reforms represent a clear win for SME operators in NSW.
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