Alert: New Queensland budget is a big win for small, medium and regional businesses
The Queensland State Government has now released their 2019-2020 budget, which contains BIG payroll tax wins for small and medium sized businesses, as well as for businesses in regional Queensland.
What is Payroll Tax?
Payroll tax is a State Government tax that businesses potentially have to pay, depending on whether their staff wages are above or below the tax-free threshold. At the moment the tax-free threshold is $1.1 million, meaning that payroll tax will be payable for businesses with taxable wages of $1.1 million or more.
The New Changes to Payroll Tax
Under the new budget, the State Government is raising the tax-free threshold from $1.1 million to $1.3 million. It is expected that this will reduce the amount of tax paid by roughly 12,000 businesses and around 1500 businesses will no longer have to pay any payroll tax at all.
In addition, for businesses in regional Queensland who employ 85% of their workers locally, the State Government is lowering the payroll tax rate by 1%. This will encourage businesses in regional Queensland to employ a majority of their workers locally.
The Loser: Large Businesses
While small and medium sized business are set to benefit from the new payroll tax changes, large businesses will be the losers. Under the new changes, large businesses with a payroll above $6.5 million will have their payroll tax rate increased to 4.95%. However, if the 85% local workers in regional Queensland discount applies, this rate will be reduced by 1 percentage point to 3.95%.
In a phrase that has probably never been uttered before, it is an exciting time for business payroll taxation in Queensland.