Small Business Grant
The Small Business Grant is a key priority of the New South Wales Government. The grant is designed to encourage the nearly 650,000 small businesses in New South Wales that do not pay payroll tax to hire new employees and expand their business.
The Office of State Revenue (OSR) is aware of situations where a customer may have been eligible for the Small Business Grant (SBG) however before the first anniversary of the commencement of the job, the customer becomes liable for payroll tax. This means the customer is no longer eligible for the SBG and may also not be eligible for the Jobs Action Plan rebate (JAP) because they did not register that new job for the JAP within the 90 days of commencement (as required by JAP revenue ruling JAP 001).
In keeping with the policy intent of the SBG and JAP, the OSR will accept applications for the JAP in situations as described above, provided all other eligibility criteria for the SBG and JAP are met, for example an increase in FTE. The customer will also have to register for payroll tax when they become liable or before the first anniversary of the new employee commencing.
An example of a customer no longer being eligible for the SBG
Mary started work with ABC Pty Ltd in August 2016. At that time ABC Pty Ltd was not liable to pay payroll tax. ABC Pty Ltd registered the new employee under the SBG scheme. In May 2017 ABC Pty Ltd became liable for payroll tax. The following month they registered and began paying payroll tax. In August 2017 ABC Pty Ltd's claim for the SBG was rejected because they were now liable for payroll tax. ABC Pty Ltd's FTE increased and they met all other eligibility criteria for the SBG and JAP. Their registration will be transferred to the JAP and they may be eligible for the JAP rebates.
If you think this scenario applies to you, please email us with an explanation of your situation.
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What businesses are eligible?
To be eligible for the grant your business must:
have an active ABN
not have a payroll tax liability, during the 12 month employment period of a new person as at 30 June of the financial year.
What employment is eligible?
A business will receive the grant if all the following employment conditions are met:
A person is employed in a position that is a new job.
The employment commences on or after 1 July 2015 and before 1 July 2019.
The employment is maintained for a period of 12 months.
Your number of full-time equivalent (FTE) employees, prior to creating a new position must increase and be maintained over a 12 month period.
The services of the employee are performed wholly or mainly in NSW.
What is a new job?
A new job is created if the number of your full-time equivalent (FTE) employees increases and that FTE is maintained over a 12 month period from the creation of the new position.
If your FTE falls below the required number, for more than 30 days any time during the 12 months, the Chief Commissioner may refuse to pay the grant.
What types of employment are excluded from the grant?
The employment of a person by an employer is excluded from the grant if:
the person engaged by your business is not considered a common law employee
the person was employed by the employer claiming the grant in the previous 12 months
a grant, subsidy or other assistance is payable to the employer for the employment of the person by the State
the employer is the Crown in right of NSW or in any of its other capacities
the employer is a public, local or municipal body or authority.
What is the minimum employment period?
To receive the grant, the minimum employment for the new job is 12 months starting on the date the employment is commenced.
Does the same person need to stay in the new role for the business to receive the Grant?
Employment is maintained if there is always a person employed in the position for which the grant is claimed.
A vacancy in a position can be disregarded if the number of days vacant does not exceed a total of 30 days in each year of employment for which the grant is claimed.
The grant may still be paid after 30 days of vacancy, if the Chief Commissioner is satisfied the length of the vacancy is beyond the employer’s control. In this case the grant will be paid on a pro-rata basis.
How do I register for the grant?
Registering for the grant will be made available on 1 July 2015 via the Small Business Grant (Employment Incentive) online application.
You are required to register the employment of a person in a position that is a new job and advise us of the number of Full-time Equivalent (FTE) employees immediately before the position was filled.
Registration for the grant can be made:
by an employer who has an active ABN and is NOT registered for payroll tax
within 60 days after the employment commences.
You can apply through the Small Business Grant (Employment Incentive) online application.
How do I calculate my number of Full-time Equivalent employees?
When registering a new job for the grant the Small Business Grant (Employment Incentive) online application will assist you in calculating your FTE.
You can also manually calculate your FTE using the following formula:
FTE = F + A/B
FTE = Full-time Equivalent
F = number of NSW full-time employees on that date
A = total number of hours worked in the preceding pay period by all NSW part-time employees employed on that date
B = average number of hours worked in the preceding pay period by all NSW full-time employees employed on that date.
To calculate the number of FTE employees:
on the date of appointment of a person in a new job, exclude the person employed in the new job
on the anniversary of commencing the new job, include the person employed in the new job.
The Chief Commissioner may agree to a different or compromise method of calculating the number of FTE employees if it is too difficult or costly to determine the exact figures.
How do I claim the grant?
You can claim the grant through the Small Business Grant (Employment Incentive) online application.
A claim for grant may be lodged:
- within 60 days after the 12 month anniversary date
- if the employment is eligible employment.
What supporting evidence must I provide?
When you register for the grant, you do not need to provide any supporting evidence. However, you must, provide supporting evidence when claiming for the grant.
Supporting evidence may include but is not limited to:
- most recent payslip before the anniversary date
- a PAYG Payment Summary relating to the financial year that falls within the 12 month grant period.
How is the grant paid?
The grant is paid by Electronic Funds Transfer when claimed on the 12 month anniversary date of the new job.
How much is the grant?
The grant is a one off payment per new position and is paid when a claim is made on the 12 month anniversary of when the position was created.
For full-time employees the grant amount is $2,000.
In the case of part time or casual employees, the grant amount will be pro-rated based on FTE hours of employment. The amount payable on the anniversary will be
Annual grant amount x C/D, where:
C = the number of hours worked by the employee during the previous 12 months
D = the average number of hours worked by full time employees during the previous 12 months.