226 Posts

Additional WA Payroll Tax Relief

Posted on April 1, 2020 by Ashley Dawson

The WA State Government has announced a range of additional payroll tax measures to support businesses impacted by the Coronavirus.

The payroll tax threshold will be increased to $1 million on 1 July 2020. This brings the increase forward from the planned date of 1 January 2021 and will result in approximately an additional 300 businesses no longer being liable for payroll tax. The threshold increase will be reflected in Revenue Online when it comes into effect.

Payroll tax will be waived for March to June for employers who have Australian taxable wages of less than $7.5 million at 30 June 2020. This waiver replaces the previously announced option to defer payment of payroll tax until July.

Employers, or groups of employers, with Australian taxable wages less than $5 million at 29 February can automatically claim the waiver by:

  1. declaring WA taxable wages as normal in Revenue Online and
  2. recording the value of WA taxable wages as exempt wages using the ‘Other Exempt Wages’ field.

Employers, or groups of employers, with Australian taxable wages of $5 million or more at 29 February, or new employers registered for payroll tax from 1 March 2020, can apply to defer lodgment and payment of returns. Payroll tax for March to June 2020 will be waived at annual reconciliation if Australian taxable wages are less than $7.5 million at 30 June 2020.

The Treasurer encourages eligible businesses not negatively affected by COVID-19 to keep paying tax as normal so the funds allocated to this initiative can be used to assist other businesses that are not so fortunate.

A one-off grant of $17,500 will be given to employers, or groups of employers, whose annual Australian taxable wages are more than $1 million and less than $4 million.

We are here to help

Trying to think of everything you need to do keep your team and customers safe and healthy right now as well as run your business is tough.

We will continue to keep you informed of all government stimulus and other measures and how they apply to your business and are here at any time of the day to give you advice on your business continuity plans and cashflow.

Please call us on (08) 9316 7000 if there is anything we can do to help you.

If you need us outside of work hours, please call one of our Directors:

Andrew Sullivan on 0407 680 698
Chris Grieve on 0417 967 539
Ashley Dawson on 0438 014 318

We are here for you and together we will all get through this.

We will all come out the other side with more resilience, more compassion and more empathy.  Until we do, please look out for each other.

Jobkeeper Payment – Further Details Released from Treasury

Posted on by Tom Francis

Treasury has released further details overnight on the Jobkeeper Payment announced on the 30th of March 2020 as part of the third stimulus package to combat the economic fallout from COVID-19. We have detailed below the updated key features of the new measures:

Jobkeeper

The Jobkeeper Payment provides a fixed wage subsidy to employers and the self-employed who retain or reinstate staff that were employed on 1st March 2020. The program will be administered by the ATO and individual employers will need to register to receive payments. Payments will begin being made on 1st May 2020 but will be backdated to 1st March, meaning the first payment received by employers will cover up to two months of wage costs.

The payments have the following key features:

An employer will receive $1,500 per eligible employee, per fortnight, to assist with the cost of wages

  • The definition of eligible employee is a full time employee, part time employee or casual employee with over 12 months service (full/part time does not have a minimum service period)
  • When registering for the scheme, an employer also registers each of their eligible employees

The $1,500 is a flat payment, meaning the amount the employee earned as a wage is irrelevant

  • An employee that is registered for the scheme must receive at least $1,500 before tax per fortnight; an employer is able to pay additional wages but not less even where the employee is part time

To be eligible for the program, employers and employees have to meet the following criteria:

Employers must:

  • Have turnover of less than $1 billion and had their revenue, or expected revenue, decrease by 30% or more

OR

  • Have turnover of over $1 billion and had their revenue, or expected revenue, decrease by 50% or more
  • Elect to participate in the scheme by registering with the ATO and providing supporting information to show their drop in turnover and provide details of their participating employees

Employees are eligible if they:

  • Were employed by the employer on 1st March 2020 and continue to be employed while participating in the program. Under the program an employee is employed even where they are stood down from duties
  • Were employed by the employer on 1st March 2020, have been dismissed and now subsequently rehired by the same employer
  • Are over 16 years of age
  • Are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
  • Have not previously claimed the Jobkeeper payment from a different employer

Self-employed participants in the program will be able to register and nominate a natural person within the business to register for the scheme. That nominated person will then receive the subsidy. The explanation to date is silent on whether this amount must be paid on as wages.

When determining how much to pay an eligible employee, the following scenarios apply:

  • Where an employee earns more than $1,500 in a fortnight under their prevailing employment conditions, the employee receives their normal wage plus super. The $1,500 is retained by the business to subsidise this wage cost.
  • When an employee earns less than $1,500 in a fortnight under their prevailing employment conditions, the employee receives $1,500 less tax. Super is calculated on the amount they would have received were it not for the subsidy. An employer may choose to pay additional super
  • Where an employee has been stood down, the employee receives $1,500 less tax. The employer is not liable for any super but may choose to pay it

Currently the ATO have a pre-registration page live on their website that allows employers to register their interest in the program. A much more comprehensive online application will be made available in due course where employers will enter details about their business and their eligible employees. At this point employers will also be required to submit supporting information showing their decrease in turnover.

As this program is yet to be legislated there are significant gaps and ambiguities in what has been announced. The following are some key examples of items that need clarification:

  • Where an eligible employee is rehired by their employer and then stood down from duties (so employed but without pay) there is no guidance on whether this would qualify for the program or be excluded under an integrity measure
  • The program appears to allow employers to reduce an employee’s regular hours to better match with the $1,500 subsidy as it is a flat payment. Where staff are salaried this may be more complicated and there is little direct guidance on either method
  • The advice from Treasury states that employees must be employed or reinstated under their ‘prevailing workplace arrangements’. We have interpreted that to mean hourly pays and conditions must be in line with award rates and employment agreements but note the definition of ‘prevailing workplace arrangements’ could be expanded to include other conditions by the legislation
  • Where multiple business owners are self-employed and operating through a trust, partnership or company and not drawing a salary they may not receive the correct benefit as only a single person for each ABN is nominated to receive payment

In conclusion we see this wage subsidy as a big positive for our clients as it allows them to retain staff and keep their business ready for the eventual recovery. For our clients who are sole traders and self employed this package offers a lifeline to those who have seen their income decrease or in some cases disappear completely.

As with all Government announcements we are eagerly awaiting legislation to review and will provide further information and updates as they come to hand.

Expanded Jobseeker access

Previously access to Jobseeker payments were denied where a person’s spouse earned more than $48,000. This limit has been lifted to $80,000 to enable more people to access these benefits. This measure appears to be aimed at supporting households that had previously set their expenditure levels, particularly with regard to housing, on the basis of at least one person earning a decent wage.

We are here to help

Trying to think of everything you need to do keep your team and customers safe and healthy right now as well as run your business is tough.

We will continue to keep you informed of all government stimulus and other measures and how they apply to your business and are here at any time of the day to give you advice on your business continuity plans and cashflow.

Please call us on (08) 9316 7000 if there is anything we can do to help you.

If you need us outside of work hours, please call one of our Directors:

Andrew Sullivan on 0407 680 698
Chris Grieve on 0417 967 539
Ashley Dawson on 0438 014 318

We are here for you and together we will all get through this.

We will all come out the other side with more resilience, more compassion and more empathy.  Until we do, please look out for each other.

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