New South Wales (NSW) businesses with an annual payroll tax liability of up to $20,000 will only be required to make an annual payment and lodge an annual payroll tax return and reconciliation as part of proposed reforms to the administration of payroll tax in the state.
Businesses with a greater liability than $20,000 up to $150,000 may now make automatic monthly payments of a fixed amount but will need to provide only one annual return and reconciliation. Businesses with payroll liabilities above $150,000 will continue to pay and lodge monthly with and annual reconciliation.
The change will commence from July 2019. It is expected to reduce the compliance burden on taxpayers and is one of many reforms announced by the state government.
Other changes include giving the Commissioner of Revenue the discretion to reduce penalties by 50% for businesses that comply with their payroll tax obligations within three months of being notified, and extending the deadline limit to submit the annual reconciliation by a week. More clarity will also be provided around payroll grouping and contractor arrangements, as well as better alignment if the definitions of employee and contractor for paroll tax purposes with those of other government entities.
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