Small business payroll tax rebate
Status: Current (Please note: This rebate scheme was scheduled to run until 2019-20, however ceased for 2018-19 and
2019-20 financial years when new payroll tax rates were introduced - view more information)
Version Number: 3
Legislation: Payroll Tax Act 2009
Date Issued: 22 June 2016
Revenue Rulings do not have the force of law.
Preamble
The Government has announced that the South Australian Small Business Payroll Tax Rebate, introduced in the 2013-14 State Budget, will be extended for an additional four years to 2019-20, as part of the 2016-17 State Budget.
Ruling
The payroll tax rebate payment will continue to be provided to eligible employers with a taxable Australian payroll of less than or equal to $1.2 million for an additional four years.
The rebate payment will be paid in the first half of each of the next 4 financial years (2016-17 to 2019-20), based on eligible employers’ taxable payrolls in the respective prior year’s annual reconciliation.
Employers will not be eligible for the rebate payment until finalisation (including payment of any underpayments made during the year) of their relevant annual payroll tax reconciliation process. Employers who are members of a group will not be able to have their rebate determined until their Designated Group Employer’s annual payroll tax reconciliation has been finalised.
The rebate payment will be determined by applying a sliding scale of rates shown in the How will the rebate be determined? section, based on eligible employers’ relevant year’s taxable payrolls respectively.
Once the rebate payments have been made, eligible employers with a taxable Australian payroll of up to $1 million will have effectively only paid payroll tax at a level equivalent to 2.45 percentage points lower than the statutory rate of 4.95%.
Rebate payments will phase out for eligible employers with a taxable payroll of between $1 million and $1.2 million.
Who is Eligible for the Rebate?
Any employer with a taxable Australian payroll of less than or equal to $1.2 million is eligible for the rebate payment, subject to the conditions outlined further in this Revenue Ruling. It should be noted that for the purposes of the rebate an eligible employer includes a single employer or an employer who is a member of a group for payroll tax purposes.
If a group’s total Australian taxable wages are greater than $1.2 million no group members will be entitled to the rebate.
Employers must be registered for payroll tax purposes as at 30 June of the relevant financial year. For example, an employer with a taxable Australian payroll of less than or equal to $1.2 million in 2015-16 but who cancels their payroll tax registration before 30 June 2016 will not be entitled to a rebate payment in the 2016-17.
Employers who first register for payroll tax on or after 1 July 2020 will not be eligible for the rebate.
How will the Rebate be Determined?
The rebate payment for eligible employers who have taxable wages below $1.2 million will be determined in accordance with the difference in rates shown in the table below.
| Annual taxable payroll ($) | Statutory tax rate (%) | Rebate rate (percentage points) |
|---|---|---|
| 600,000 to 1,000,000 | 4.95 | 2.45 |
| 1,000,001 to 1,050,000 | 4.95 | 1.95 |
| 1,050,001 to 1,100,000 | 4.95 | 1.45 |
| 1,100,001 to 1,150,000 | 4.95 | 0.95 |
| 1,150,001 to 1,200,000 | 4.95 | 0.45 |
| Above 1,200,000 | 4.95 | - |
* Rate payable on the value of wages above $600,000.
How much is the Rebate?
The following table outlines the potential rebate payment that will be available to eligible employers.
| Annual payroll ($) | Annual payroll ($) | Rebate payment ($) |
|---|---|---|
| 600,000 | 0 | 0 |
| 650,000 | 2,475 | 1,225 |
| 700,000 | 4,950 | 2,450 |
| 800,000 | 9,900 | 4,900 |
| 900,000 | 14,850 | 7,350 |
| 1,000,000 | 19,800 | 9,800 |
| 1,050,000 | 22,275 | 8,775 |
| 1,100,000 | 24,750 | 7,250 |
| 1,150,000 | 27,225 | 5,225 |
| 1,200,000 | 29,700 | 2,700 |
| 1,250,000 | 32,175 | 0 |
Conditions
Employers must be up-to-date with their previous financial year’s payroll tax obligations and payments to receive the rebate.
Employers cannot deduct the rebate from their monthly return or annual reconciliation return payments.
When will the Rebate be received?
Eligible employers are not required to apply for the rebate outside of the annual reconciliation process.
For example, a rebate payable in 2016-17 will be calculated on the basis of employer’s Australian taxable wages paid in 2015-16 and the rebate will be paid following finalisation of the 2015-16 annual reconciliation process.
Amended Rebates
Where a reassessment to any employer’s annual reconciliation is required and that employer has already received a rebate payment in respect of that financial year, they will either be entitled to a further rebate payment or be required to repay any overpayment of the rebate.
View this Revenue Ruling as a PDF (PDF 263KB)