Payroll Tax Rebate Scheme
Frequent questions
Payroll Tax Rebate Scheme (Disability Employment)
- 1. What is the Employer Payroll Tax Rebate for new employees with disabilities?
The NSW Government has introduced legislation to Parliament that will give businesses a payroll tax rebate for hiring a person with a disability. It is an initiative as part of Stronger Together 2.
- 2. Why is the NSW Government introducing this Rebate?
To increase employment opportunities for people with a disability and create an incentive for employers to hire people with a disability.
- 3. When does this rebate start for employers?
The rebate scheme will start on 1 January 2012.
- 4. Which employers are eligible for the rebate?
Employers paying payroll tax, who hire new employees with a disability who have completed the 'Transition to Work' Program. This program is administered by the NSW Department of Family and Community Services and delivered through non government organisations.
- 5. What employment is excluded?
a) The employment of a person by an employer is excluded from the rebate scheme if:
the person was employed by the employer claiming the rebate or a group member in the previous 12 months, or
the person’s employment is a continuation of employment with another employer, or
any wages paid by the employer to the person are not taxable wages (i.e. the wages must be subject to NSW payroll tax under the nexus provisions), or
any wages paid by the employer to the person are exempt wages (e.g. paid by charitable bodies), or
the employer is entitled to a rebate under the Payroll Tax Act 2007 (i.e. apprentice/trainee rebate), or
a rebate, subsidy or other assistance is payable to the employer for the employment of the person by the State, or
the employer is taken to be the employer of the person under the contracting provisions or employment agency provisions of the Payroll Tax Act 2007, or
the employer is the Crown in right of New South Wales or in any of its other capacities, or
the employer is a public, local or municipal body or authority constituted under the law of the Commonwealth or of a State or Territory.
b) A person's employment with an employer (the new employer) is a continuation of employment with another employer (the previous employer) if:
the person was, within 12 months before the date on which the person commenced employment with the new employer, employed by the previous employer in a business or undertaking, and
that business or undertaking has been the subject of a merger with the business or undertaking of the new employer or has been taken over or otherwise acquired by the new employer.
- 6. What does 'new' employee mean?
A new employee means an employee who hasn't been employed by the business or group of businesses in the last 12 months. The position does not have to be a newly created position.
- 7. As an eligible employer how much will I be entitled to receive?
Eligible employers will be entitled to a payroll tax rebate of $4000. It will be paid in two equal payments of $2000. The first payment is paid after 3 months of employment and the second after 6 months of employment.
- 8. What conditions of employment are required?
The employee with a disability must be employed for an average of at least 12 hours per week. However, the Chief Commissioner has the discretion to pay the rebate even if the employee does not work 12 hours a week. This would include circumstances beyond the employer's control.
The employee can be employed on a full- time, part-time or casual basis. The full rebate of $2000 will be paid as long as this requirement is fulfilled. The employee can be in the open labour market or supported employment.
- 9. Does the rebate need to be paid back if the employer doesn't continue employing the employee beyond the 3 or 6 month period?
No. If the employee is no longer with the employer after the 3 or 6 month period none of the rebate needs to be paid back.
- 10. When does the employer receive the rebate?
On the 3 and 6 month anniversary of employment, the employer is required to declare to OSR that the employee was employed for an average of at least 12 hours per week for the 3 month period.
- 11. Can this rebate be claimed in addition to any other OSR administered payroll tax rebates or exemptions?
No. If the employer receives other NSW government rebates or grants for payroll tax, they will not be entitled to this rebate.
- 12. Does the employee have to have completed the Transition to Work (TTW) program immediately prior to starting their employment with the new employer? i.e. If a person exited the TTW program in 2008 can a new employer receive the rebate for them in 2012?
An employer is entitled to the rebate even if there was a break between finishing the TTW program and entering the workforce.
- 13. If someone has been employed continuously since exiting the Transition to Work (TTW) program and then leaves that employer to go to a new employer, can the new employer still receive the tax rebate?
An employer can receive the rebate as long as the employee did not work for that employer in the past 12 months.
- 14. Can more than one employer receive the rebate for the same person at the same time i.e someone working two jobs?
The rebate is made to the employer for employing a worker with a disability. Provided each employer meets the eligibility test, including the average of 12 hours per week worked, each employer would be eligible for the rebate.
- 15. If someone works with one employer for six months then leaves after the employer has received the full rebate, can the next new employer also receive the rebate?
As long as the employee has not been working with the employer or a related employer in the previous 12 months, then the new employer would be eligible to receive the rebate.
- 16. If a person has carried out work experience or voluntary work with the new employer prior to formal employment, is the employer still eligible for the payroll tax rebate?
Yes, as long as the person was not receiving payment for the voluntary work or work experience.
- 17. If an employee leaves employment before the end of the 3 or 6 month quarter, will an employer be entitled to a partial payroll tax rebate?
No, although in certain circumstances the Chief Commissioner may pay the rebate if the required hours per week are not worked for the 3 or 6 months period (see answer to question 16).
- 18. Is there other assistance available to employers who employ people with a disability?
There are a range of Commonwealth funded schemes which provide support. More information is available at:
Read more about Transition to Work at:
