Tax-free threshold for business payroll tax to increase to $1.3M

New initiatives plan to deliver lower taxes for 13,200 small and medium businesses

The recently handed down Queensland Budget aims to support business with a few key initiatives.

• New tax-free threshold for Queensland small business payrolls
• Job-generating payroll tax discount for regional Queensland businesses
• Employ, save and grow! Rebates for employers that grow jobs

New $1.3M payroll tax free threshold

The tax-free threshold for businesses having to pay payroll tax will increase from $1.1M to $1.3M. This increase applies to all Queensland businesses. Approximately 1,500 Queensland businesses will fall below the threshold and pay no payroll tax.

• The payroll tax rate for businesses for a payroll up to and including $6.5M will remain at 4.75%
• The payroll tax rate for large businesses with a payroll above $6.5M will have a new rate of 4.95% (up 0.2%)

Payroll tax discount for regional businesses*

• Reduces the payroll tax rate for medium size businesses (up to and including $6.5M) by 1% to 3.75%
• Reduces the payroll tax rate for large businesses in regional Queensland ($6.5M and over) by 1% to 3.95%
• Applies to businesses with a registered business address in regional areas and where 85% of taxable wages are paid to employees who reside in regional Queensland. Regional QLD will include Cairns, Central Queensland, Darling Downs–Maranoa, Mackay–Isaac–Whitsunday, Queensland–Outback, Townsville and Wide Bay
• The government hope applying a residential test will mean regional businesses will have a financial incentive to hire local. This will keep more money and more jobs in local towns and communities

Payroll Tax Rebates for businesses hiring new employees*

• New employee rebate for growing businesses
• Applies to employers who have a net growth in total full-time employees over a year
• Applies as a 100% rebate on the payroll tax relative to net growth in employees, up to a cap of $20,000
• Continued rebates for businesses employing jobseekers, apprentices and trainees
• Back to Work initiative provides up to $20,000 in financial support for businesses that employee eligible jobseekers. Full details of this continued program at backtowork.initiatives.qld.gov.au
• This budget provides two more years of the Apprentice and Trainee payroll tax rebate, which is paid at 50% of apprentice and trainee wages. Details of the rebate are available at business.qld.gov.au

*Accessing multiple benefits

Employers may be eligible to receive more than one, or all of the payroll benefits. For example, a regional employer may be eligible to receive:

• A benefit from the new $1.3M payroll tax threshold A payroll tax rate discount of 1%
• Up to $20,000 for increasing employees
• Up to $20,000 for hiring eligible job seekers
• 50% rebate off apprentice and trainee wages paid.

Source: https://budget.qld.gov.au/payroll-tax/