Are you a business owner located in New South Wales with a thriving workforce? Do you offer workplace benefits and commit to superannuation fees?
If you answered yes to one or more of the above, you could be liable for payroll tax. With the hustle and bustle of running a business, you may wonder where you’ll find the time to learn about this obligation.
Take our helping hand as we guide you through what NSW payroll tax is, confirm when it applies, outline what grouping means, and share where you can find one-to-one support.
What Is NSW Payroll Tax?
Unlike national taxes, like income and capital gains, the State offices govern payroll tax instead of the Australian Taxation Office. Therefore, the legislation only applies to businesses in New South Wales. Terms may vary under other States’ rules.
The tax applies when the total Australian wages you pay exceeds $1.2 million for the tax years 2022–23 and 2023–24. NSW state currently charges a 5.45% per cent tax rate.
NSW Payroll Tax Registration Requirements
You must register for NSW payroll tax when your payable Australian wages meet or exceed the threshold. Register via the Revenue NSW Government website or enlist professional support.
NSW State requires payments and nil returns by the 7th of every month or the nearest business day. Nil returns essentially mean that you paid under the monthly thresholds and, therefore, aren’t liable for tax.
Thresholds are as follows:
- 28-day month: $92,055
- 30-day month: $98,630
- 31-day month: $101,918
You can also lodge an annual reconciliation return by the 28th July every year.
Which Payments Are Subject to Payroll Tax in NSW?
NSW State categorises any payment or financial benefit in exchange for talent or services as assessable. Check out the full list below:
- Wages and salaries
- Superannuation contributions
- Apprentice and traineeship wages
- Contractor payments
- Termination payments
- Fringe benefits and financial bonuses
- Shares
- Options
- Directors’ fees
What Does Grouping Mean for Payroll Tax?
As a good measure against tax evasion, the NSW State might apply group provisions under the following circumstances:
- Related corporation: Holding companies and subsidies of companies connected under the “related bodies corporate” classification are grouped.
- Common control: If you or a group of persons, including yourself (such as partners and joint owners), have an interest in two or more businesses, you could be grouped.
- Subsuming: This provision groups two or more businesses already associated with pre-existing groups.
- Common use of employees: State offices may group entities with employees who perform duties in connection with two or more businesses.
Additional groups include tracing of interest, NSW public service agencies, and illegal Phoenix operators. Connect with a chartered accountant to determine potential group provisions.
Each company must pay and lodge payroll tax as separate entities and cannot spread costs between businesses.
Let’s Handle Payroll Tax Together
As a NSW-based business, we know what it takes to follow the intricacies of the State. Get in touch for expert support in navigating business-related taxes and managing your books efficiently and proactively.
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