Payroll Tax Annual Reconciliation: Including Key Considerations for Employers with Remote Workers (July 2024 Tax Update)

Relevant For:

Business owners and payroll managers.

Key Points:

• Payroll tax applies to employers exceeding state-specific wage thresholds.
• Each state/territory has unique payroll tax rates and rules.
• WA payroll tax for 2023/24: 5.5% on wages over $1M; reconciliation due 21 July 2024.
• Remote work adds complexity: single threshold for grouped businesses, multi-state employee apportionment.
• Example: NSW business hiring in Victoria incurs Victorian payroll tax despite low wages.

Full Article:

Payroll tax is a state tax impacting all employers with taxable Australian wages exceeding state-specific thresholds. Understanding the nuances of payroll tax legislation across different states and territories is crucial for compliance.

Each state and territory has distinct payroll tax legislation, encompassing varying rates and thresholds. The definition of taxable wages and rules for contractor payments also differ, making it vital for employers to stay informed about local regulations.

For instance, businesses in Western Australia are liable for payroll tax at a rate of 5.5% on Australia-wide wages exceeding $1 million for the 2023/24 financial year. A diminishing threshold may apply for wages between $1 million and $7.5 million. Employers must complete the annual payroll tax reconciliation by 21 July 2024. Employers in other states should consult their respective Revenue Offices for specific due dates.

Managing Remote Workers and Payroll Tax

Employers face additional complexities with the growing trend of remote work. Key considerations include: