Chance for payroll tax savings in Queensland, South Australia and Tasmania

Changes to the way payroll tax is applied to companies that operate as groups could help businesses in Queensland, South Australia and Tasmania make substantial savings on their tax bill.

Changes to the way payroll tax is applied to companies that operate as groups could help businesses in Queensland, South Australia and Tasmania make substantial savings on their tax bill.

Deloitte tax partner Frank Klasic says changes that came into effect on 1 July mean these states were allowed to broaden or apply discretion to exclude employers from a payroll tax group where those employers are commonly controlled or where they share employees between the entities.

“This is an excellent opportunity for those employers who are currently in a payroll tax group to reconsider their position and apply to be de-grouped,” Klasic says.

Businesses linked by common ownership or control and those who share employees, are “grouped’ for payroll tax purposes. Grouping is designed to stop an employer splitting payroll tax obligations across a number of companies to stay under payroll tax thresholds.

Klasic says there are a number of benefits that an employer could enjoy as a result of not being in a payroll tax group.

“These include no longer being liable to pay payroll tax in Australia, to being entitled to the full payroll tax deduction in any given state where the employer only pays wages in that state,” Mr Klasic says. “The tax savings from being successfully de-grouped from a payroll tax group can be quite significant.”

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