Three relief measures have been announced by the Victorian Government:
- Waiving of 2019-20 payroll tax for employers with annual Victorian taxable wages up to $3 million - announced on 21 March 2020.
- Exempting additional payments under the JobKeeper program from payroll tax - announced on 5 May 2020.
- Deferring 2020-21 payroll tax liabilities for employers with Victorian payrolls up to $10 million, based on their 2019-20 financial year returns, until the 2021-22 financial year - announced on 13 September 2020.
Employers with annual Victorian taxable wages up to $3 million had their payroll tax for the 2019-20 financial year waived.
Eligible employers had to continue lodging returns but did not need to make further payments for the 2019-20 financial year.
The State Revenue Office directly contacted eligible employers in relation to an emergency tax relief refund of payroll tax already paid in the 2019-20 financial year and they were able to claim the refund online.
The eligibility threshold applied to each employer, so any member of a group that pays Victorian taxable wages of less than $3 million per annum was eligible for the relief.
JobKeeper eligibility requirements are set by the Australian Government and are available on the Australian Taxation Office website.
Any additional payments made to bridge the gap between an employee’s normal wage and the $1500 per fortnight required to qualify for JobKeeper payments are exempt from payroll tax:
- For employees who have come to an agreement with their employer to be stood down and not perform any work, the full $1500 paid to them is exempt from payroll tax.
- For employees paid less than $1500 per fortnight, the payroll tax exemption applies to the difference between their wage and the $1500. For example, to qualify for a JobKeeper payment, an employer must pay an additional $500 to an employee who earns $1000 a fortnight. This additional payment of $500 is exempt from payroll tax.
The additional payments are not included in rateable remuneration for the purposes of calculating WorkCover Premiums. For more information, visit the Worksafe website.
Employers do not need to apply for this emergency relief measure. In line with existing payroll tax arrangements, employers are 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 the State Revenue Office.
Example 1 - I have an employee who has been stood down
Patrick has been stood down. Patrick’s employer receives the JobKeeper payment for him and must pay him $1500 per fortnight. To help make it easier for Patrick’s employer to keep him on, the entire $1500 per fortnight paid to Patrick is an additional payment and is exempt from payroll tax.
Example 2 - I have an employee who is ordinarily paid less than $1500 per fortnight
Olivia was working part time and earning $1000 per fortnight before the JobKeeper program was introduced. Olivia continues to work the same hours. Olivia’s employer now receives the JobKeeper payment for her and must pay her an additional $500 per fortnight – a total of $1500 per fortnight. The additional payment of $500 made by the employer to Olivia is exempt from payroll tax. Olivia's normal fortnightly wage of $1000 is not exempt from payroll tax.
Example 3 - I have an employee who is ordinarily paid more than $1500 per fortnight but their pay has been reduced to less than $1500 per fortnight
Priya was earning $1800 per fortnight before the JobKeeper program was introduced. As a result of the coronavirus pandemic, Priya’s hours have been reduced and her fortnightly wage is now $1 200 per fortnight. Priya’s employer receives the JobKeeper payment for her and must pay her an additional $300 per fortnight – a total of $1500 per fortnight. The additional payment of $300 is exempt from payroll tax. The remaining $1200 of Priya’s fortnightly wage is not exempt from payroll tax.
Example 4 - I have an employee who is currently paid more than $1500 per fortnight
Quinn currently earns $1 800 per fortnight. Consistent with the health restrictions, he continues to work and is paid his normal wage. He also takes a week of paid annual leave at his normal wage. Quinn’s employer qualifies for the JobKeeper program and receives the JobKeeper payment for him. No part of Quinn’s wage is exempt from payroll tax.
Example 5 - I have an employee who is not an eligible employee under the JobKeeper program
Rachel is a casual worker who has been working for her current employer for three months and earns $800 per fortnight. Rachel’s employer is not eligible to receive the JobKeeper payment for her. No part of Rachel’s wage is exempt from payroll tax.
3. Deferring 2020-21 payroll tax liabilities for eligible employers until the 2021-22 financial year
Employers with Victorian payrolls up to $10 million, based on their 2019-20 financial year annual reconciliation returns, can defer their 2020-21 payroll tax liabilities until the 2021-22 financial year.
This means they can pay their 2020-21 payroll tax liabilities in four quarterly instalments in the 2021-22 financial year:
- Liabilities for July, August and September 2020 will be due on 7 September 2021.
- Liabilities for October, November and December 2020 will be due on 7 December 2021.
- Liabilities for January, February and March 2021 will be due on 7 March 2022.
- Liabilities for April, May and June 2021 will be due on 7 June 2022.
This deferral relief applies to each employer. This means membership of a payroll tax group is not considered in determining whether or not the member’s Victorian taxable wages for the 2019-20 financial year exceeded the $10 million threshold.
To be eligible for this deferral measure, an employer must lodge their:
- 2019-20 financial year annual reconciliation return, and
- monthly payroll tax returns for the months of July 2020 through to June 2021.