Legislative amendments to reduce payroll tax for small business are included in the Payroll Tax (Exemption for Small Business) Act 2018, assented to on 25 October 2018.
From 1 January 2019, businesses with annual taxable wages of up to $1.5 million will not be liable for payroll tax, and those with taxable wages between $1.5 million and $1.7 million will benefit from a reduced payroll tax rate.
As these changes come into effect mid-financial year, the 2018-19 financial year will be split into two return periods:
|1 July 2018 to 31 December 2018|
|1 January 2019 to 30 June 2019|
From 1 July 2019, you will no longer be required to pay payroll tax in South Australia if your Australia wide wages, or group wages, continue to remain below $1.5 million.
As payroll tax is based on your annual taxable wages, you will need to remain registered for the 2018-19 financial year. If you have advised RevenueSA that your estimated Australia wide wages, or group wages, for the 2018-19 financial year are under $1.5 million, RevenueSA will convert you to an annual cycle so you will not be required to lodge monthly returns for the January 2019 to May 2019 periods.
You will be required to complete the 2018-19 Annual Reconciliation by 22 July 2019. An email will be sent to you once the Annual Reconciliation opens in mid-June.
If you expect your 2019-20 financial year Australia wide wages, or group wages, to remain under $1.5 million, you should cancel your registration as part of the 2018-19 Annual Reconciliation. If you cease employing in South Australia before 30 June 2019, please contact RevenueSA.
You will continue to lodge your monthly returns using your current deduction entitlement (now called the ‘exempt amount’). The rate of tax you pay will be automatically calculated when you complete and lodge your returns.
The rate at which payroll tax is applied will depend on your estimated annual wages (for Period 2 between 0% and 4.95%). This will be automatically calculated through the online return process and a calculator will be available mid December 2018 to calculate your new rate.
When you complete your 2018-19 Annual Reconciliation you will need to provide your, or your group’s, total South Australian and Australia wide wages for the year, together with a split of wages for the two periods (as specified above). Payroll tax payable and the deduction/exempt amount will be calculated based on the proportion of your wages paid in each period.
No change. You will continue to lodge your monthly and annual reconciliations returns using your current deduction entitlement (up to $600 000 p.a.).
You can register for our webinars in November 2018 that will cover these changes.
Information will also be sent in June 2019 prior to the 2018-19 Annual Reconciliation. Webinars will also be conducted in June/July 2019 to assist you in completing your annual reconciliation.
If you have specific questions, please contact our payroll tax team at firstname.lastname@example.org or (08) 8204 9880.