Payroll tax frequent questions 2009
- What is the threshold for 2009-10?
$638,000
- What is the rate for 2009-10?
For the period 1 July 2009 to 31 December 2009 it is 5.75 per cent.
For the period 1 January 2010 to 30 June 2010 it is 5.65 per cent.
- How is the threshold determined?
It will be indexed each year based on the percentage change in the Sydney CPI number over the 12 months ending in March prior to the commencement of each payroll tax year.
- What if the CPI falls?
The threshold will not be reduced even if the CPI falls.
- Will the threshold always be a multiple of 1,000?
Yes, if the threshold using the CPI is a figure ending up to $500 the threshold will be rounded down to the next $1,000 (eg $618,350 becomes $618,000) and a figure more than $500 will be rounded up (eg $618,700 becomes $619,000).
- What rate do I pay on my 2009-10 reconciliation?
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You will pay 5.75 per cent on wages that exceed the threshold for the 6 months ending 31 December 2009. That threshold is $321,622 (184 days x 638,000 divided by 365 days), and
You will pay 5.65 per cent on wages that exceed the threshold for the 6 months ending 30 June 2010. That threshold is $316,378 (181 days x 638,000 divided by 365 days)
- What if I am under the threshold for one half of the year and over it for the other half of the year?
If the wages paid or payable in one half of the year is less than the allocated threshold for that half of the year, the unused portion can be applied to the other half of the year.
Example:
Wages for first 6 months = $500,000. Threshold = $321,622
Wages for second 6 months = $220,000. Threshold = $316,378
The $96,378 of unused threshold for the second half of the year can be applied to the first half of the year, giving a threshold of $418,000 for the first half of the year. The tax payable for the first 6 months is 5.75 per cent of $82,000 and no tax is payable for the second 6 months. This will be reconciled as part of your annual reconciliation.
- What if I am over the threshold for one half of the year but under the annual threshold?
In that case no payroll tax is payable for that financial year and a refund will be provided as part of the annual reconciliation process.
- What are the rate changes?
The rate of Payroll tax of 5.75 per cent is to be reduced as follows:
To 5.65 per cent from 1 January 2010
To 5.50 per cent from 1 January 2011
The rate for the following financial years will be:
Financial year 1 July – 31 December 1 January – 30 June 2009/10
5.75%
5.65%
2010/11
5.65%
5.5%
For 2011-12 the rate of 5.50 per cent will apply for the whole year.
- Does this mean the states are no longer harmonised?
No, thresholds and rates were not part of the harmonisation process. Each jurisdiction is still able to set its own rate and threshold as financial circumstances require.
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