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Sydney and NSW small business relief

Payroll tax is seen by all businesses who are subject to it as a complete waste of time and money. Effectively you are taxed and penalised if you grow your business and increase your staffing levels and hence total staffing costs rise exponentially. As your business grows so does your payroll tax, creating a real and genuine disincentive for growth.

It would seem that the NSW state Government has taken heed of this and although it would be nice if they were to abolish payroll tax altogether (a pipe dream I know!) they’ve done the next best thing. The “Jobs Action Plan” seeks to create incentives to employ new staff and grow your staffing levels by issuing rebates to eligible businesses for the hiring of new staff.

For businesses that are registered for payroll tax they must also register for the scheme separately. By doing so, they create an online register of new employees so you and the OSR can track the increase in your level of equivalent full time employees.

The scheme works by paying a rebate for new staff employed since 1 July 2011 that are continuously employed for at last twelve months. The person being employed must be filling a new role in your business that increases your total number of permanent staff. Once you register and add your new employee to the register, the system will set a date of twelve months form their start date. On that twelve month anniversary, if that person is still employed by your business you become eligible for a rebate of $2,000.00. If that same person is still on your payroll in a further twelve months, your business is eligible for a further rebate of between $2,000.00 and $3,000.00 depending on specific dates.

Note that to be eligible for the rebate you must have actually be registered for and paid some payroll tax as the rebate is limited to any payroll tax amounts you have already paid. The rebate effectively serves to reduce your payroll tax to nil at best, you can’t make extra money from this scheme.

There are many fine points and technicalities to the scheme but if your business is registered for and paying payroll tax in NSW you should register for this scheme asap. The OSR has indicated that it will accept backdated registrations so it’s never too late. For more information or assistance regarding NSW payroll tax and how it impact on your business contact m.a.s accountants, serving small businesses across Sydney, Melbourne and the rest of Australia for over fifty years.

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