The Western Australian Government has announced a range of payroll tax measures to support businesses impacted by COVID-19.
Payroll Tax Waiver
From March to June 2020 payroll tax may be waived for employers, whose annual Australian taxable wages are less than $7.5 million at 30 June 2020.
Employers with Australian taxable wages less than $5 million at 29 February can automatically claim the waiver by declaring WA taxable wages in Revenue Online and recording the value of WA taxable wages as exempt wages using the ‘Other Exempt Wages’ field.
Employers with Australian taxable wages of $5 million or more at 29 February 2020, or new employers registered for payroll tax from 1 March 2020 must apply for the waiver.
The Treasurer hopes that eligible businesses that were not affected by COVID-19 will keep paying tax as normal so the funds allocated to this initiative can be used to help other businesses that have been adversely affected.
Payroll tax exemption for JobKeeper payments
From 1 July 2020 the WA Government is providing a payroll tax exemption for wages subsidised by the JobKeeper scheme.
JobKeeper subsidised exempt wages are wages paid or payable by an employer that are subsidised by the JobKeeper payment. However, the exemption does not apply to any part of the wages paid or payable that are not subsidised. This essentially means only the first $1,500 a fortnight for each employee receiving JobKeeper is exempt from payroll tax.
When lodging payroll tax returns, any Australian taxable wages that were or will be subsidised by the JobKeeper payment would be included in the “Other” section of exempt payments.
One-off grant of $17,500
Businesses with a payroll of more than $1 million and less than $4 million are eligible for a one-off grant of $17,500. The annual Australian taxable wages for 2018-19 are used to determine the eligibility for the payment.
If the employer was not previously registered for payroll tax, the 2019-20 Australian taxable wages will be used to determine the eligibility for the grant. The grant will automatically be paid by cheque after the completion of the annual reconciliation process.
Please note that if the annual Australian wages are above $1m for 2019-20 and the employer declares March to June 2020 wages as exempt, then the annual taxable wages are reduced by that amount. Subsequently, if the net amount is less than $1m then the employer will not be eligible for the full grant payment of $17,500.
In this case, the employer has the following options:
- Declare March to June 2020 wages as exempt, and only pay payroll tax on wages from July 2019 to February 2020.
- Pay payroll tax on the total wages paid in 2019-20 and receive a one-off grant payment of $17,500.
The employer has the right to choose either of the two options above depending on which one is more beneficial for the business.
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