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Victoria unveils new payroll tax break
Victorian businesses that re-employ or hire new workers over the next two years are set to receive a new payroll tax credit, as the state government unveils a range of tax measures aimed at stimulating the economy.
Victoria unveils new payroll tax break
Victorian businesses that re-employ or hire new workers over the next two years are set to receive a new payroll tax credit, as the state government unveils a range of tax measures aimed at stimulating the economy.
The $836 million measure – dubbed the “new jobs tax credit” – will see eligible businesses receive a tax credit of 10¢ for every dollar of Victorian taxable wages that is above those paid for the previous financial year.
The credit will be non-refundable, and can therefore only reduce payroll tax liability to zero.
Available to businesses with a payroll of less than $10 million, the measure will run for two years, and is expected to provide payroll tax relief to 14,000 businesses in 2020-21 and 21,000 businesses in 2021-22.
An example by the Victorian government shows that a business that increases its taxable wages by $100,000 for 2020-21 compared with the previous year would receive a credit of $10,000 to offset against its 2021-22 Victorian payroll tax liability.
Eligible employers will receive the credit automatically through their payroll tax account with the State Revenue Office.
The Victorian government expects the measure to support up to 9,400 jobs, working in tandem with previously announced payroll tax measures, including refunds to small businesses with payrolls of less than $3 million, and a deferral of payroll tax for the full 2020-21 year for businesses of payroll of more than $10 million.
“There is no sugar-coating it, this pandemic has hit businesses hard. This support will help them open their doors, get back on their feet and employ more Victorians,” said Victoria Treasurer Tim Pallas.
Land tax and duty concessions
As part of its state budget, the Victorian government has also announced a land transfer duty waiver of 50 per cent for new residential properties, and 25 per cent for existing residential properties, for purchases up to $1 million for contracts entered into between 25 November 2020 and 30 June 2021.
The government will also bring forward the previously announced 50 per cent commercial and industrial land transfer duty concession for regional Victoria to contracts entered into on or after 1 January 2021, instead of 1 July 2023.
Land tax breaks, including a 50 per cent land tax discount for build-to-rent developments running from 2022 to 2040, have also been announced.
R&D tax incentive support
Eligible small and medium-sized enterprises claiming the research and development tax incentive will also have access to low-interest loans for up to 80 per cent of their forecast refundable tax offset.
The government believes the measure will help Victorian enterprises maintain their cash flow while pursuing vital research and development work.
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