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.

Waiver for hospitality businesses

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Payroll tax will be waived from 1 April to 30 June 2022 if:

  • you are a hospitality business employer (i.e. 50% or more of your taxable wages are paid to employees who work solely or predominantly in the preparation and service of meals, cooked food or beverages directly to the public) and
  • you are registered for payroll tax on or before 21 July 2022 and
  • your or your group’s total Australian taxable wages for the 2021-22 financial year are more than $4 million and less than $20 million and
  • you have experienced at least a 40% loss of turnover during any consecutive 28 day period between 1 January 2022 to 30 April 2022 compared to the same period last year. You can compare your turnover to a different 28 day period in the previous 12 months if you started operating after May 2021 or if the same period in 2021 gives an inaccurate representation of your trading turnover and
  • you are not eligible to receive the grant under the Small Business Hardship Grants Program.

This waiver is available under a declaration by the Treasurer (see page 3442 of the Government Gazette).

How to claim the waiver

Australian taxable wages of more than $3 million but less than $15 million at 31 March 2022

To apply the waiver, you need to:

  • lodge returns for April to June 2022 in Revenue Online, declaring WA taxable wages as normal and
  • declare the value of WA taxable wages as exempt wages using the ‘Other Exempt Wages’ field.

You must retain evidence of your or your group’s Australian taxable wages at 31 March 2022 to show you are entitled to the waiver.

If you are part of a group, the designated group employer (DGE) is responsible for determining the group’s Australian taxable wages. Group members who are hospitality business employers should confirm the group's Australian taxable wages with the DGE. You must retain evidence to show the DGE notified you of your eligibility to claim the waiver.

Use the Hospitality business payroll tax waiver worksheet to determine if you are eligible to claim the waiver.

Australian taxable wages of more than $4 million but less than $20 million at 30 June 2022

If you, or your group, have Australian taxable wages of more than $4 million and less than $20 million at 30 June 2022, you can:

  • amend returns you have already lodged and paid for April to June to apply the waiver or
  • if you received approval to defer the April to June returns to 21 July - apply the waiver at annual reconciliation to those returns or lodge and pay the returns with no penalty.

Use the Hospitality business waiver end-of-year worksheet to determine if you are eligible to apply the waiver to your April to June returns.

Threshold increase

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The threshold increased to $1 million on 1 July 2020.  This is reflected in Online Payroll Tax.

Payroll tax waiver

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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 2019-20 payroll tax waiver 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

To qualify for the waiver, new employers were required to be registered for payroll tax by 21 July 2020.

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.

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

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You did not need to apply for the grant.

A one-off grant of $17,500 was paid 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 were automatically paid by cheque from July 2020.

  • If you were not previously registered for payroll tax, your 2019-20 Australian taxable wages were used to determine your eligibility for the grant.  
  • For a group of employers, a single grant was paid to the designated group employer.

JobKeeper payments

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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 fortnightly 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 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.

Subsidised wages to apprentices and trainees

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The Australian Government’s Boosting Apprenticeships Commencements scheme subsidises up to 50 per cent of gross wages paid to trainees and apprentices who commence training between 5 October 2020 and 31 March 2022. A payroll tax exemption applies to the subsidised portion of wages paid to trainees who commenced training between 5 October 2020 and 30 September 2021.

You must retain evidence of any wage subsidies you receive.

See the Minister's media statement.

Wages paid to trainees

To claim the exemption in your payroll tax return, declare the gross amount of trainee wages under the ‘WAGES – Gross Wages & Salaries’ return field then record the subsidised amount under the ‘LESS EXEMPT PAYMENTS – COVID-19 Trainees’ return field.

Wages paid to apprentices

This scheme has no impact upon the existing apprentice exemption as wages paid to an apprentice under an approved training contract registered under the Vocational Educational and Training Act 1996 (Part 7 Division 2) are exempt from payroll tax.

To claim the exemption, declare gross amount of apprentices' wages under the ‘WAGES – Gross Wages & Salaries’ return field, then declare the wages as exempt under the ‘LESS EXEMPT PAYMENTS – Apprentices’ return field.

Announcements

News story

COVID-19 payroll tax relief

Additional payroll tax measures have been introduced to support businesses impacted by COVID-19.
Page reviewed 27 July 2022