Coronavirus payroll tax relief

Four relief measures were announced by the Victorian Government:

1. Waiving 2019-20 payroll tax for employers with annual Victorian taxable wages up to $3 million.
2. Exempting additional payments under the JobKeeper program from payroll tax.
3. Deferring 2020-21 payroll tax for employers with Victorian wages up to $10 million until the 2021-22 financial year.
4. Waiving 2020-21 and 2021-22 payroll tax for eligible employers who applied for the New Jobs payroll tax credit. This measure closed on 30 June 2024.

1. Waiving 2019-20 payroll tax for eligible employers

Employers with annual Victorian taxable wages up to $3 million were eligible to have their 2019-20 payroll tax waived. This tax relief measure is closed. Applications and refund claims were to be submitted by 30 April 2021.

2. Exempting additional payments under the JobKeeper program from payroll tax

The JobKeeper program was an Australian Government subsidy for businesses significantly affected by the COVID-19 pandemic. The scheme started on 30 March 2020 and ended on 28 March 2021.

JobKeeper eligibility requirements were set by the Australian Government.

Additional payments made to ensure employees qualified for JobKeeper payments were exempt from payroll tax.

Employers did not need to apply for this emergency relief measure. In line with existing payroll tax arrangements, employers were responsible for:

• calculating their payroll tax liability and treating the additional payments as exempt wages
• lodging monthly returns and paying the relevant payroll tax on taxable wages
• maintaining accurate records
• providing evidence that the correct amount of tax was paid if requested by us.

3. Deferring 2020-21 payroll tax liability for eligible employers until the 2021-22 financial year

Employers with Victorian wages up to $10 million in 2019-20 could defer their 2020-21 payroll tax until the 2021-22 financial year.

4. Waiving 2020-21 and 2021-22 payroll tax after applying for the New Jobs payroll tax credit

The measure to waive payroll tax for the 2020–21 and 2021–22 financial years closed on 30 June 2024. Further relief is only available if:

• you are lodging or amending taxable wages for those years due to a request made to the State Revenue Office before 1 July 2024, or
• the State Revenue Office began an investigation before 1 July 2024.

Eligibility and benefits

• Employers eligible for the New Jobs payroll tax credit received a partial or full waiver of their 2020–21 and 2021–22 payroll tax liabilities.
• The credit was 10 cents for every dollar of Victorian taxable wages paid in the relevant year that exceeded the previous financial year’s wages.

Non-group employers

For an employer who is not a member of a payroll tax group as at 30 June of the relevant designated financial year, the eligibility requirements are as follows:

1. The employer was an employer as at 30 June of the relevant designated financial year.
2. The employer paid or was liable to pay Australian wages before 1 January of the previous year.
3. The employer’s Australian wages in the previous year were no more than $10 million.
4. The employer has lodged their annual returns in respect of the designated financial year and the previous financial year.

Eligible non-group employers shall be entitled to a tax credit of 10 cents for each dollar by which their total Victorian taxable wages paid or payable during the designated financial year exceed the total Victorian taxable wages paid or payable by the employer during the previous financial year.

The employer will not have to make a claim for the credit. It will be applied after the employer has lodged their annual return for the designated financial year and any resulting overpayment will be subsequently refunded to the employer.

Payroll tax eligibility for group employers 

For employers who are members of a payroll tax group as at 30 June of the relevant designated financial year, eligibility for a tax credit is determined by the group’s total Australian wages. The requirements differ based on whether the group’s membership has changed during the designated or previous financial year.

If the group’s membership has remained constant during both years, the eligibility requirements are as follows:

1. At least one group member is an employer as at 30 June of the relevant designated financial year.
2. The group paid or was liable to pay Australian wages before 1 January of the previous financial year.
3. The group’s total Australian wages paid or payable during the previous financial year did not exceed $10 million.
4. The group has lodged annual returns for both the designated and previous financial years.

Eligible groups are entitled to a tax credit of 10 cents for every dollar by which the total Victorian taxable wages paid or payable by all members during the designated financial year exceed those paid or payable during the previous financial year.

The credit is applied after all members have lodged their annual returns for the designated year and will be reflected in the group’s annual return. Any resulting overpayment will be refunded to the designated group employer.

Groups where the members have changed

Where the composition of the group membership has changed during either the designated financial year or the previous financial year (e.g. the group was previously part of a larger group or one of the members was previously not a member of the group), the eligibility requirements are:

1. At least one of the members of the group is an employer as at 30 June of the designated financial year.
2. At least one member of the group as at 30 June of the designated year paid or was liable to pay Australian wages before 1 January of the previous financial year.
3. The total Australian wages paid or payable during the previous financial year by the members of the group as at 30 June were no more than $10 million.
4. The members of the group as at 30 June of the designated year have lodged their annual returns in respect of the designated financial year and the previous financial year.

Eligible groups shall be entitled to a tax credit of 10 cents for each dollar by which W1 exceeds W2, where:

• W1 is the sum of:
  • the Victorian taxable wages paid or payable during the designated financial year by each employer who is a member of the group as at 30 June of the designated financial year, and
  • for any employer who was previously a member of the group at any time during the designated financial year or previous financial year, and ceased to employ before 30 June of the designated financial year – the Victorian taxable wages paid or payable during the designated financial year by that employer while they were a member of the group or before they were a member of the group.
• W2 is the sum of:
  • the total Victorian taxable wages paid or payable during the previous financial year by each employer who is a member of the group as at 30 June of the designated financial year, and
  • for any employer who was previously a member of the group at any time during the designated financial year or previous financial year, and ceased to employ before 30 June of the designated financial year – the total Victorian taxable wages paid or payable during the previous financial year by that employer while they were a member of the group or before they were a member of the group.

The credit will be applied, after all the members of the group have lodged their annual returns for the designated financial year, to the designated group employer’s annual return. Any resulting overpayment will be refunded to the designated group employer.

Amendments after 1 July 2024

If you request an amendment to your taxable wages for the 2020-21 or 2021-22 financial years after 1 July 2024, you will not be eligible for further relief.

However, you may still receive a credit up to the value of your original credit. The credit will be recalculated based on your amended wages. You will receive the lesser of the recalculated credit or your previous credit.