SA Payroll Tax - changes from 1 January 2019

By Phil Shepherd - November 7, 2018

Legislative amendments to reduce Payroll Tax in South Australia for small business were included in the Payroll Tax (Exemption for Small Business) Act 2018, which received Royal assent on 25 October 2018.

As a result of these amendments, from 1 January 2019 businesses with annual taxable wages of:

  • up to $1.5 million will not be liable for Payroll Tax; and
  • between $1.5 million and $1.7 million will benefit from a reduced Payroll Tax rate.

As these changes come into effect mid-financial year, RevenueSA has announced that the 2018/19 financial year will be split into two return periods. The first period will be from 1 July 2018 to 31 December 2018 and the second period will be from 1 January 2019 to 30 June 2019.

The rates and thresholds that will apply during these periods are set out in the table below (this is an edited version of material on the RevenueSA website. See the full version at Rates and Thresholds).

What you need to know

Businesses with estimated wages under $1.5 million for the 2018/19 financial year

From 1 July 2019 a business will no longer be required to pay Payroll Tax in South Australia if their Australia wide wages (or their group wages if they are part of a group) continue to remain below $1.5 million.

As Payroll Tax is based on annual taxable wages, businesses that are already registered will prima facie need to remain registered for the 2018/19 financial year.

If businesses advise RevenueSA that their estimated Australia wide wages (or their group wages if they are part of a group) for the 2018/19 financial year are under $1.5 million, RevenueSA will convert them to an annual cycle so they will not be required to lodge monthly returns for the January 2019 to May 2019 periods.

Businesses with estimated wages under $1.5 million for 2018/19 will be required to complete their 2018/19 Annual Reconciliation by 22 July 2019. RevenueSA has advised that e-mail notifications will be sent to businesses once the Annual Reconciliation period opens in mid-June.

If businesses expect their 2019/20 financial year Australia wide wages (or group wages) to remain under $1.5 million, they should cancel their registration as part of the 2018/19 Annual Reconciliation. 

Businesses with estimated wages between $1.5 million and $1.7 million for the 2018/19 financial year

RevenueSA has advised that businesses with estimated wages between $1.5 million and $1.7 million for 2018/19 should continue to lodge their monthly returns using their current deduction entitlement (now called the ‘exempt amount’). The rate of tax they pay will be automatically calculated when they complete and lodge their returns.

The rate at which Payroll Tax is applied on a business will depend on their estimated annual wages (note: for Period 2 the rate will vary between 0% and 4.95% depending on the level of wages). RevenueSA has advised that the correct rate will be automatically calculated through the online return process and a calculator will be available mid-December 2018 to calculate the new rate.

When they complete their 2018/19 Annual Reconciliation, businesses will need to provide their (or their group’s if they are part of a group) total South Australian and Australia wide wages for the year – together with a split of wages for the two periods (as specified above). The Payroll Tax payable and the deduction / exempt amount will then be calculated based on the proportion of wages paid in each period.

Businesses with wages over $1.7 million for 2018-19

No change – i.e. they will continue to lodge their monthly and annual reconciliations returns using their current deduction entitlement (up to $600,000 per annum).

More information

Businesses can register for RevenueSA webinars in November 2019 that will cover these changes.

RevenueSA has also announced that information will be sent to businesses in June 2019 prior to the 2018/19 Annual Reconciliation.

Webinars will also be conducted by RevenueSA in June and July 2019 to assist businesses in completing their annual reconciliations.

If you have specific questions about the above changes please contact us. RevenueSA has also stated that its Payroll Tax team can be contacted about the changes at payrolltax@sa.gov.au or +618 8204 9880.


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