Western Australian businesses will not need to pay payroll tax on Commonwealth JobKeeper payments with a Bill introduced this week to guarantee exemption.
WA Parliament has been called back to deal with urgent legislation related to COVID-19 response.
If passed, the legislation will exempt Western Australian businesses from paying payroll tax on the Commonwealth’s JobKeeper wage subsidy.
The Commonwealth’s JobKeeper Payment scheme provides eligible employers with payments of $1,500 per fortnight for up to six months for each current and recently stood-down employee.
Under existing laws, the $1,500-a-fortnight JobKeeper payment would attract payroll tax.
However, the new legislation will ensure WA businesses are exempt from any payroll tax on the wage subsidy.
For more information on payroll relief in WA, click here.
The legislation adds to $1.7 billion in support measures for WA businesses and householdswith Treasurer Ben Wyatt highlighting it will “remove the unintended tax consequence of the Commonwealth’s JobKeeper scheme and ensure WA businesses and employees get the full benefit of the program”.
“This included the bringing forward of the increase in the payroll tax exemption threshold to $1 million by six months, as well as a four-month waiver of payroll tax and a one-off grant of $17,500 for eligible small-to medium businesses,” he said.
Payroll exemption in South Australia
The WA announcement follows the move for South Australian businesses whose employees qualify for the Federal Government’s historic $1500-a-fortnight JobKeeper support payments to be exempt from paying any payroll tax on the wage subsidy.
Under existing laws, the JobKeeper payment – part of the Commonwealth’s $130 billion stimulus measure to keep eligible businesses connected with their workforce during the coronavirus crisis – would attract payroll tax.
However, Treasurer Rob Lucas said the State Government had moved swiftly to exempt these payments from payroll tax, to ensure no unintended impost to businesses already impacted by the pandemic and necessary trading, travel and social gathering restrictions to limit its spread.
“We want to do everything in our power to ensure local businesses and jobs are supported throughout the greatest economic challenge of our time,” said Treasurer Lucas.
Accordingly, the Government will be introducing urgent legislation into State Parliament on Tuesday to amend the Payroll Tax Act 2009.
As many as 6 million Australian workers are expected to benefit from the wage subsidy, which will be issued from the first week of May but be backdated to March 30.
Other states and territories
To date only Western Australia and South Australia have specifically addressed payroll tax exemptions in relation to JobKeeper payments, however other states and territories are expected to follow suit.
In addition, most states/territories have announced general payroll tax relief measures to assist businesses through the COVID-19 period.
For more information visit the taxation sections on your state / territory government’s website or contact [email protected] for AMMA’s assistance.
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