The NSW government previously brought forward the increased payroll tax threshold by one year to $1 million in response to the COVID-19 pandemic. A further permanent increase to the payroll tax threshold was announced as part of the budget, taking the threshold up to $1.2 million from 1 July 2020 onwards. The payroll tax rate will reduce from 5.45% to 4.85% for two years from 1 July 2020.
These changes to the payroll tax threshold will ensure that many small and medium businesses will not be liable for payroll tax, and the rate cuts will reduce the burden on those businesses that still are. Even with this in mind it is important for business owners to consider all aspects of their payroll tax position, from wages paid in other states through to contractors.
Small & Medium Business Assistance
For government fees and charges that small and medium businesses need to pay, those that are under the payroll tax threshold will be provided with a $1,500 digital voucher to cover this.
A new Jobs Plus Program aims at encouraging domestic and international business into NSW. It will support companies who want to relocate their head offices to NSW or expand their number of jobs held in NSW, with the aim to create or support 25,000 jobs to 30 June 2022. The program includes up to four years of payroll tax relief for every new job created where a business has created 30 or more new net jobs.
Investment into businesses in regional NSW include:
- $100 million in grants to the Regional Jobs Growth Fund to enourage investment, expansion and increase customers and jobs.
- $300 million over two years to the Regional Growth Fund for new economic development and job creation programs.
The government is providing additional investment across a number of reforms over the long-term including a tax reform for what they consider an ‘inefficient’ property tax system. Aiming to lower barriers to home ownership and boost long-term growth, public feedback will be sought over the coming months on possibly transitioning away from the current transfer duty and land tax system.
An overview of what other areas the budget is investing in can be found here. For guidance on making sure you maximise the opportunities in the NSW budget, our team at BLG Business Advisers are here to help so please talk with us today.