COVID-19 – What is the payroll tax relief in Queensland?

COVID-19 – What is the payroll tax relief in Queensland?

26 March 2020 Authored by: Sarah Lancaster   |   Topics: Tax and revenue, Tax disputes, Professional advisers, COVID-19 resources

The Queensland Government announced its stimulus package to support health, jobs, households and Queensland businesses affected by coronavirus. The package includes:

  • refunds of two months’ payroll tax payments
  • payroll tax ‘holiday’ for three months – i.e. employers won’t have to pay payroll tax for three months
  • deferral of payroll tax for the 2020 calendar year, until 14 January 2021.

This is different from the initial announcement, which included a deferral of payroll tax.

Am I eligible for a payroll tax refund, holiday and deferral?

To be eligible for the refund, holiday and deferral, a business will need to be:

  • an employer that pays taxable wages of $6.5 million or less
  • an employer that pays taxable wages of $6.5 million or more that has been negatively affected by coronavirus.

The taxable wages thresholds are Australian taxable wages. It is not currently clear in the application form whether the Australian taxable wages are calculated on the basis of the 2019 income year or on an estimate of the current financial year.

However, the Office of State Revenue have verbally said that if a business has lodged periodic returns in the 2020 income year and has paid payroll tax at the higher rate of 4.95% (because it pays taxable wages of $6.5 million or more), then it will have Australian taxable wages of $6.5 million or more for the purpose of the payroll tax relief.

If, when businesses lodge their final annual payroll tax return, they have paid less than $6.5 million in taxable wages in the 2020 income year, there will be an adjustment.

The payroll tax refund, holiday or deferral will only apply to those taxable wages that were subject to payroll tax in Queensland.

Employers who pay taxable wages of $6.5 million or less can apply for:

  • two month payroll tax refund
  • three month payroll tax holiday
  • payroll tax deferral for the 2020 calendar year.

Employers who pay more than $6.5 million in taxable wages and have been negatively affected by coronavirus, can apply for:

  • payroll tax deferral for the 2020 calendar year
  • two month payroll tax refund.

A business will be affected by coronavirus if their current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected, compared with normal operating conditions.

How do I apply for a payroll tax refund, holiday or deferral?

Employers may have already:

  • received an email about the payroll tax refund, holiday and deferral
  • applied for the payroll tax deferral that the Government announced earlier in the month.

If you had already applied for the payroll tax deferral following the Government’s earlier announcement, you do not need to apply for it again – it will be extended to the new deferral date in January 2021.

Businesses will need to continue lodging payroll tax returns via OSRConnect, but, at this stage, the deferred date for payment will be 14 January 2021.

For those who haven’t applied for the payroll tax deferral, refund or holiday, there are two application forms – one for the payroll tax deferral and another one for the payroll tax refund and holiday.

The current guidance is that any employers wanting to apply for the payroll tax refund or holiday must apply by 31 May 2020.

Please contact a team member if you would like to discuss.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.