Budget repair task to include payroll tax changes for large employers

• A temporary progressive payroll tax scale will apply to large employers for a limited period of five years from July 1, 2018
• This is estimated to raise $435 million over the forward estimates period, providing a contribution to the Government's Budget repair efforts
• It is expected that less than one per cent of businesses in WA will be impacted
• Small businesses protected from Budget repair measures 

The State's largest employers will assist in Budget repair through a temporary progressive payroll tax scale for employers with payrolls exceeding $100 million.

The new measure helps share the burden of Budget repair across the community, with the State Government minimising the impact on struggling families and small businesses.

From July 1, 2018 to June 30, 2023, Western Australian employers with an Australia-wide payroll exceeding $100 million - but not exceeding $1.5 billion - will have that part of their payroll taxed at a rate of six per cent (up from the current rate of 5.5 per cent). 

Western Australian employers with an Australia-wide payroll exceeding $1.5 billion will have that part of their payroll taxed at a rate of 6.5 per cent.

Employers who also operate outside of WA will pay the same effective rate of tax on their Western Australian wages as employers with the same Australia-wide wages that operate solely in WA.

This measure is not expected to have significant industry impacts given the fact that:

• the new scale will operate for only five years;
• there will be no change in payroll tax for the 92 per cent of payroll tax payers that have Australia-wide payrolls of $100 million or less;
• the greatest impacts will be on large businesses and industries that are generally highly profitable, including mining, construction, retail, transport and the financial sector; and
• Payroll tax is generally considered to have similar economic impacts as a flat personal income tax or a broad-based consumption tax. 

For more 2017-18 State Budget information, visit http://www.ourstatebudget.wa.gov.au

Comments attributed to Treasurer Ben Wyatt:

"The Government is temporarily changing the payroll tax scale for the largest companies to assist in the difficult task of Budget repair.

"This tough but necessary task will require contributions from all members of the community and this includes the major corporate sector.

"It is expected that less than one per cent of businesses in Western Australia will be impacted by this change.

"Around one-fifth of the additional revenue generated from this measure is expected to be paid by the larger iron ore producers in the State.

"This responsible measure will only apply for five years, by which time the State's finances are on a more stable footing."

Treasurer's office - 6552 5900