Determining liability
Threshold
The NSW tax free threshold for the full 2009-10 financial year is $638,000.
An individual employer's entitlement to this threshold is affected by 3 factors
commencing or ceasing to employ within a financial year
paying payroll taxable wages in another Australian State or Territory
being a member of a group.
Businesses commencing or ceasing to employ within a financial year do not get a full threshold entitlement. They receive a proportion of the threshold equal to the ratio of the number of days they employ to the number of days in the financial year.
When a business pays wages in NSW and interstate, or is part of a group with interstate wages, the NSW threshold is determined as a proportion equal to the ratio of the NSW wages to the total Australian wages.
The liability of wages in other jurisdictions is determined in accordance with the payroll tax legislation in that jurisdiction. If a payment is not liable in a jurisdiction as a wage, then it is not included in the total Australian wages.
Grouped employers receive one threshold entitlement between them. Each group must nominate a designated group employer (DGE) who receives the group's threshold entitlement. All other members of the group who employ in NSW receive no threshold entitlement, and must pay tax at a flat rate on their gross NSW wages.
For an employer claiming a threshold entitlement, there are 4 types of wages that might need to be determined:
Wages paid by an employer that are liable as NSW wages.
Wages paid by that employer that are liable in other Australian States or Territories.
Wages paid by other members of a group that are liable as NSW wages.
Wages paid by other members of a group that are liable in other Australian States or Territories.
Tax payable
The NSW payroll tax rate is:
5.75% from 1 July 2009 to 31 December 2009
5.65% from 1 January 2010 to 30 June 2010
Payroll tax is levied on an employer's gross NSW wages minus any threshold entitlement
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