Under the Victorian measures, any top-up payments - that is, additional payments to employees earning less than $1,500 per fortnight that bridge the gap between their actual wage or salary and the scheme’s minimum payment of $1,500 per fortnight - will be exempt from payroll tax.
An employee normally earns $1,300 per fortnight (pre-tax). Under the JobKeeper scheme the employee is eligible to receive a $1,500 per fortnight. Victoria’s newly announced payroll tax exemption means that, while the $1,300 payment will be subject to payroll tax, the additional $200 top-up from the employer will be exempt.
However, for employees who earn more than $1,500 per fortnight, the full wage or salary will be subject to payroll tax.
For employees who have been stood down, the full $1,500 JobKeeper payment will be exempt from payroll tax.
The Victorian Government’s announcement follows payroll tax measures announced by Western Australia, South Australia, Tasmania and the Australian Capital Territory in relation to the JobKeeper scheme. However, unlike the Victorian exemption, in each of those jurisdictions, the full $1,500 JobKeeper payments will be exempt from payroll tax regardless of the employee’s actual earnings in the fortnight.
Details of the jurisdiction-specific payroll tax exemptions from JobKeeper payments of can be found below.
- South Australia
- Western Australia
- Australian Capital Territory: The ACT has provided no further details other than an undertaking from the Treasurer.
- Other states and territories: To date, no announcements have been made by New South Wales, Queensland or the Northern Territory, however, announcements are understood to be imminent.
The JobKeeper exemptions from payroll tax are in addition to other COVID-19 related state tax relief measures announced by the various jurisdictions including waivers and deferrals of payroll tax. Details of these can be found here.
Pitcher Partners will keep you apprised and informed of developments as they arise. In the meantime, should you have any queries or concerns, please contact your Pitcher Partners representative.