Payroll Tax Rebate Scheme
Frequent questions
Payroll Tax Rebate Scheme (Jobs Action Plan)
- 1) What is the Payroll Tax Rebate Scheme (Jobs Action Plan)?
The Jobs Action Plan is designed to give businesses the incentive to employ new workers and expand their enterprises. Under the plan, businesses that increase the number of full-time equivalent (FTE) employees for a period of at least 2 years, will receive a payroll tax rebate following the employment of each additional employee in a position that is a new job.
40,000 of the new jobs targeted will be prioritised for non-metropolitan areas of NSW with the remaining 60,000 in metropolitan areas.
- 2) Which areas are included in the metropolitan and non-metropolitan areas?
Metropolitan area – being the area constituted by the following Local Government Areas:
(a) Ashfield, Auburn, Bankstown, Blacktown, Blue Mountains, Botany Bay, Burwood, Camden, Campbelltown, Canada Bay, Canterbury, Fairfield, Gosford, Hawkesbury, Holroyd, Hornsby, Hunters Hill, Hurstville, Kogarah, Ku-ring-gai, Lane Cove, Leichhardt, Liverpool, Manly, Marrickville, Mosman, North Sydney, Parramatta, Penrith, Pittwater, Randwick, Rockdale, Ryde, Strathfield, Sutherland Shire, Sydney, The Hills Shire, Warringah, Waverley, Willoughby, Wollondilly, Woollahra, Wyong,
(b) Newcastle
(c) Wollongong.
Non-metropolitan area includes:
That part of the State that does not fall within the metropolitan area.
- 3) Do I have to register for the rebate?
Employers must register showing the details of the employment of a person in a position that is a new job and advise the number of FTE employees immediately before the position was filled.
Registration may be made:
by an employer who is registered and paying payroll tax
between 1 July 2011 and 30 June 2013
within 30 days after the employment to which the application relates first commences.
- 4) What happens if I have made incorrect declarations on my online registration form?
You can access and amend your details (except the number of FTE employees) through the online registration form at any time. When you lodge an amended form it will update your previously lodged information and you will be provided with a new lodgement reference number. If you need to modify the number of FTE employees, please contact us immediately.
- 5) What does eligible employment mean?
Employment is eligible employment if:
a person is employed (full-time or part-time) in a position that is a new job, and
the employment commences on or after 1 July 2011, and
the employment is maintained for a period of at least 2 years, and
the services of the employee are performed wholly or mainly in NSW, and
the employment is not excluded from the rebate scheme.
- 6) What does the term new job mean?
A position is a new job if the employment of a person in that position results in a sustained increase in the number of the employer’s FTE employees. This increase must be sustained on both the first and second anniversaries of the date the employment commenced and throughout the two years.
- 7) How do I calculate the number of FTE employees I have?
The number of FTE employees of an employer on the date of appointment of a new employee (excluding the new employee) and on the first and second anniversary of a new employee’s appointment (including the new employee) is the sum of F + A/B where:
F = the number of full time employees on that date
A = the total number of hours worked in the preceding pay period by all part-time employees employed on that date
B = the average number of hours worked in the preceding pay period by all full-time employees employed on that date.
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.
- 8) What is the minimum employment period?
The minimum employment period is 2 years starting on the date the employment concerned is claimed to have commenced.
Employment is maintained if there is always a person employed in the position for which the rebate 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 rebate is claimed. The rebate may be paid if the 30 days are exceeded but only if the Chief Commissioner is satisfied the length of the vacancy is beyond the employer's control. In this case the rebate will be paid on a pro-rata basis.
- 9) What employment is excluded?
1) 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. ad
2) 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.
- 10) How do I claim the rebate?
To apply for the rebate employers will need to submit an application for the payment of the rebate in respect of the employment of a person.
An application for rebate may be lodged:
within 30 days after the end of the year of employment
if the employment is eligible employment.
- 11) What conditions apply regarding the payment of the rebate?
Certain conditions apply in respect of the payment of the rebate for each position that is a new job. These conditions are:
for part-time employees, the rebate will be pro-rated based on FTE hours of employment
the rebate will only be payable if the higher level of employment is maintained for the first and second anniversary of employment and throughout the 2 years
the amount of rebate payable cannot exceed the employer’s net payroll tax liability for the tax year ending in the year in which the claim is lodged
if the rebate is paid prior to an employer’s annual payroll tax liability being determined, the employer is required to refund any rebate amount that exceeds the employer’s net payroll tax liability for the relevant tax year
- 12) How do I calculate the amount of rebate payable?
The total rebate payable is $4,000 per full-time employee and a proportion of $4,000 for a part-time employee.
The rebate is payable in 2 payments of up to $2,000 on the first and second annual anniversary of the commencement of employment.
In the case of part-time employees, the rebate payable on each anniversary is:
$2,000 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.
The maximum amount of rebate payable per FTE employee to an employer should not be reduced if the payroll tax attributed to a particular new employee’s wages is less than the rebate.
- 13) Under what circumstances would I have to repay a rebate?
If at any time a position that is a new job is not maintained, the employer is required to repay any rebate paid in respect of that position.
The Chief Commissioner may pay rebates before an employer’s annual payroll tax liability is determined, but the employer will be required to refund any rebate amount that exceeds the employer’s net payroll tax liability for the relevant tax year.
- 14) I created a new position and claimed the rebate but the employee resigned. It may take weeks to fill the vacancy. Will I lose the rebate?
If the number of days the position is vacant does not exceed a total of 30 days in each year of employment for which the rebate is claimed, the rebate may still be claimed.
It may also be paid if the 30 days are exceeded but only if the Chief Commissioner is satisfied the length of the vacancy is beyond the employer's control. In this case the rebate will be paid on a pro-rata basis.
- 15) How are the number of FTE employees treated in the case of mergers and takeovers?
When an employer increases the number of their FTE employees as a result of a takeover or merger, the rebate will not be payable for their ‘new’ employees if, immediately prior to the takeover or merger, the ‘new’ employees were employed by either employer.
If a company merger creates a new company with a new ABN and as a consequence has to reregister for payroll tax, the number of FTE employees would be taken from the date of the new payroll tax registration.
- 16) What happens if I employ a person and their position is not maintained until 30 June 2013?
If any new job for which a rebate has been claimed and paid is not maintained until 30 June 2013, the employer must repay the rebate paid for that position. Interest and/or penalty tax may also be payable if repayment is late.
To minimise any repayments, and avoid the potential for penalty and interest to be imposed, you should notify us as soon as any changes occur to a new position that is or may be subject to a claim for rebate
- 17) What happens if my company ceases operating prior to 30 June 2013?
A payroll tax change of details form must be completed and you will be required to repay any rebate(s) paid.
- 18) What happens if employees resign from my company and I am no longer liable to pay payroll tax?
A payroll tax change of details form must be completed and you will be required to repay any rebate(s) paid.
- 19) What happens to my rebate if I have a payroll tax liability?
The Chief Commissioner may apply the amount (or part) of the rebate towards any NSW revenue liability of the claimant.
- 20) I have a NSW employee who conducts work interstate. Can I apply for the rebate if this is a new job?
You can apply for the rebate if the services of the employee are performed wholly or mainly in NSW and the wages paid are taxable in NSW under the nexus provisions.
- 21) Am I eligible for the rebate if a new employee is recruited for an existing job/position?
If the new employee results in an increase in the number of the employer’s FTE employees, then the employer is entitled to claim a rebate for the employment of that new employee, even though the position is not a new job.
The employer would not be eligible for the rebate if the new employee was employed by the employer claiming the rebate or a group member in the previous 12 months.
- 22) Can I wait to claim the rebate at the end of the 2 year period?
The Payroll Tax Rebate Scheme (Jobs Action Plan) Act 2011 requires employers to claim the rebate within 30 days of the first and second anniversary of the employment of the new employee.
- 23) If I am in a single lodger group, can I claim the rebate?
Any employer whose return is included in the single lodger group's return would be eligible to claim the rebate.
- 24) I have a contractor working for me and I decide to make the contractor permanent. Can I claim the rebate?
No. The employer would not be eligible for the rebate if the new employee was employed by the employer claiming the rebate or a group member in the previous 12 months.
- 25) Can I apply for the rebate if I employ casual staff?
A. Yes. If the employment of the casual staff member results in an increase in the number of the employer’s FTE employees, then the employer is entitled to claim a rebate for the employment of that new casual employee.
- 26) I have a casual employee who I want to make permanent. Can I apply for the rebate?
A. The employer would not be eligible for the rebate if the casual employee was employed by the employer claiming the rebate or a group member in the previous 12 months.
