19 Jul 2017

Does Payroll Tax apply to my business?

Consider Jenny’s case

Jenny runs the payroll department for a medium sized business that specialises in manufacturing widgets. The business is rapidly expanding. The business has a workforce of 30 employees in Victoria. Up until now the monthly wage cost in Victoria was $40,000, however with the hiring of new employees they have exceeded the monthly threshold of $52,083. Jenny now needs to register for Victorian payroll tax and will be required to lodge a monthly Payroll Tax Return.

If Jenny has employees in different states then she may have payroll tax liabilities in each state. Monthly wage thresholds vary from state to state.

The Victorian Budget announced an increase in the annual Payroll Tax threshold from $575,000 to $625,000 from 1 July 2017. The payroll tax rate is 4.85% and is collected by the State Revenue Office (SRO), therefore any amount in excess of $625,000 will have tax levied at this rate.

Payroll tax is based on but is not limited to the following:

• Ordinary times wages
• Superannuation
• Reportable FBT

Should you wish to discuss your Payroll Tax obligations please feel free to contact Andrew Marshall or Janine Orpwood on 5427 8100 for an initial consultation.


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