Oct 29, 2018 / News

Payroll Tax Changes – from 1 January 2019

Effective from 1 January 2019, businesses with annual taxable wages of up to $1.5 million will no longer be liable for payroll tax in South Australia, and those with taxable wages between $1.5 million and $1.7 million will benefit from a reduced payroll tax rate.

The legislative amendments were assented to on 25 October 2018.

As the changes come into effect mid-financial year, the 2018/19 financial year will be split into two separate reporting periods:

Period 1:  1 July 2018 to 31 December 2018

Period 2:  1 January 2019 to 30 June 2019

What employers need to know

Employers with estimated wages under $1.5 million for 2018/19

From 1 July 2019, you will no longer be required to pay payroll tax in South Australia if your Australia wide wages, or group wages, continue to remain below $1.5 million.

Changing from monthly to annual reporting

As payroll tax is based on your annual taxable wages, you will need to remain registered for the 2018/19 financial year. If you have advised RevenueSA that your estimated Australia wide wages, or group wages, for the 2018/19 financial year are under $1.5 million, RevenueSA will convert you to an annual cycle so you will no longer need to lodge monthly returns for the January 2019 to May 2019 periods.

When to lodge the 2018/19 Annual Reconciliation?

The 2018/19 Annual Reconciliation needs to be completed by 22 July 2019.

When to cancel your registration?

If you expect your 2019-20 financial year Australia wide wages, or group wages, to be under $1.5 million, you can cancel your registration when preparing the 2018/19 Annual Reconciliation.

Employers with estimated wages between $1.5 million and $1.7 million for 2018/19

Will the rate change for your monthly returns?

You will continue to lodge your monthly returns using your current deduction entitlement (now called the ‘exempt amount’). The rate of tax you pay will be automatically calculated when you complete and lodge your returns.

The rate at which payroll tax is applied will depend on your estimated annual wages (for Period 2 between 0% and 4.95%). This will be automatically calculated through the online return process and a calculator will be available mid December 2018 to calculate your new rate.

Will both periods be calculated in your 2018/19 Annual Reconciliation?

When completing the 2018-19 Annual Reconciliation you will need to provide your, or your group’s, total South Australian and Australia wide wages for the year, together with a split of wages for the two periods. Payroll tax payable and the deduction/exempt amount will be calculated based on the proportion of your wages paid in each period.

Employers with wages over $1.7 million for 2018/19

No change. Continue to lodge monthly and annual reconciliation returns using your current deduction entitlement (up to $600 000 p.a.).

How can Nexia Edwards Marshall help you?

For any questions or to discuss any of the above in relation to your business, please contact George Papanicolaou or your Nexia Edwards Marshall Adviser.

To find out more visit the Revenue SA website: https://www.revenuesa.sa.gov.au/generic-pages/news-articles/payroll-tax-changes

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.