COVID-19 relief: Payroll Tax Employer Guide

Payroll tax measures were introduced to support businesses impacted by the coronavirus.

The Government introduced payroll tax measures to support  businesses that have been impacted by COVID-19.

Threshold increase

Show more

The threshold has increased to $1 million on 1 July 2020.  This replaced the previously announced increase planned for 1 January 2021. 

The threshold increase is reflected in Online Payroll Tax.

Payroll tax waiver

Show more

Payroll tax could be waived from March to June 2020 for employers, or groups of employers, whose Australian taxable wages were less than $7.5 million at 30 June 2020.

Employers must retain evidence of their Australian taxable wages at 29 February 2020 showing their entitlement to claim the waiver.

For group employers, the designated group employer (DGE) was responsible for determining the group’s Australian taxable wages and for notifying group members if the group was eligible for the waiver. Group members must retain evidence to show the DGE notified them of their eligibility to claim the waiver.

If you were eligible for the payroll tax waiver, use this reconciliation worksheet to help you calculate your 2019-20 taxable wages.

The Treasurer encourages eligible businesses not negatively affected by COVID-19 to keep paying tax as normal so the funds allocated to this initiative can be used to assist other businesses that are not so fortunate.

Australian taxable wages less than $5 million at 29 February 2020

You were not required to apply for the waiver. 

  • You had to lodge and pay all returns up to and including your February return.
  • If your Australian taxable wages (including WA taxable wages and interstate taxable wages) were less than $5 million, you had to lodge your returns for March to June, entering your WA taxable wages as normal. Then offset your WA taxable wages in the 'exempt (other) wages' field to apply the waiver.
  • You continue to be entitled to the waiver even if your Australian taxable wages were $7.5 million or more at 30 June 2020.

Australian taxable wages $5 million or more at 29 February 2020, or new employers from 1 March

You had to apply to defer lodging and paying returns if your Australian taxable wages were $5 million or more at 29 February and you expected your wages to be less than $7.5 million at 30 June, or if you were a new employer registered for payroll tax from 1 March 2020.

Payroll tax for March to June 2020 will be waived at annual reconciliation if Australian taxable wages were less than $7.5 million at 30 June 2020.

If your application was approved, your due date for lodgment and payment was extended to 21 July. 

  • If your 2019-20 annual Australian taxable wages were less than $7.5 million, payroll tax for the March to June returns could be waived.  You had to lodge your returns for March to June, entering your WA taxable wages as normal, then offset your WA taxable wages in the 'exempt (other wages' field to apply the waiver.
  • If your 2019-20 annual Australian taxable wages were $7.5 million or more, you needed to complete your returns and pay tax for the months that were deferred.

If your annual Australian taxable wages were $7.5 million or more and you are concerned about meeting your payroll tax obligations, you can apply online for a payment arrangement.

The Pay-Roll Tax Relief (COVID-19 Response) Act 2020 received Royal Assent on 20 April 2020 and is deemed to take effect from 1 March 2020. The Act deals with the payroll tax waiver and the exemption for payments made under the JobKeeper Payment scheme. See the Parliament website for information about the Act and the Explanatory Memoranda.

Grant payment

Show more

You do not need to apply for the grant.

A one-off grant of $17,500 is being given to employers, or groups of employers, whose annual Australian taxable wages for 2018-19 were more than $1 million and less than $4 million.  Grants are automatically being paid by cheque from July.

  • If you were not previously registered for payroll tax, your 2019-20 Australian taxable wages will be used to determine your eligibility for the grant.  Your grant will automatically be paid by cheque after the completion of the annual reconciliation process.   
  • For a group of employers, a single grant will be payable to the designated group employer.

Eligible taxpayers should log in to Online Payroll Tax to ensure their postal address is correct.

JobKeeper payments

Show more

Wages that are subsidised by the Australian Government’s JobKeeper scheme are exempt from payroll tax and should not be included in your payroll tax returns. However, any amounts you pay above the $1,500 per fortnight subsidy are taxable and must be declared in your returns.

If you have entered JobKeeper payments incorrectly you can adjust your returns in Revenue Online prior to annual reconciliation.

See the reconciliation worksheet for information about how to calculate your WA taxable wages. 

See the Treasurer’s media statement for more information.

The Pay-Roll Tax Relief (COVID-19 Response) Act 2020 received Royal Assent on 20 April 2020 and is deemed to take effect from 1 March 2020. The Act deals with the payroll tax waiver and the exemption for payments made under the JobKeeper Payment scheme. See the Parliament website for information about the Act and the Explanatory Memoranda.

Announcements

News story

COVID-19 payroll tax relief

Additional payroll tax measures have been introduced to support businesses impacted by COVID-19.
Page reviewed 23 September 2020