Employers subject to payroll tax will generally benefit from an expected relaxation of payroll tax by all states & Territories.
Each state has their own version of concessions, including increased thresholds and one-off grants. For more detail on each State and Territory, click on the appropriate link in the article in our news feed titled ‘COVID-19 resources -Update July 2020’.
Generally, the principle will be that wages paid to meet the requirements of the JobKeeper scheme are exempt from payroll tax, to the extent that they exceed the employees earned wage.
The JobKeeper receipt by the employer is income, (no GST), so the subsidised payment to the employee should remain tax neutral to the employer.
The payments are exempt from payroll tax if the employee had been stood down.
Whether the employee payment is taxable will depend upon the wages before Jobkeeper and the hours worked.
Northern Territory has a new field on the Annual Declaration to identify the JobKeeper portion, which will be deducted from the gross.
Other states require exclusion of the JobKeeper portion of wages, subject to whether the wages are higher or lower than the JobKeeper amount.
Further details will be needed on the Annual Adjustment return, with calculations back to JobKeeper start in March 2020. Examples are provided by each collection authority.
Businesses with annual Victorian taxable wages, up to $3m, will have their entire payroll tax for the 2020 year waived. Any payroll tax already paid can be refunded. No further payments are required, although payroll tax reporting should continue.