COVID-19 VIC: Business – Coronavirus Payroll Tax Relief

This program aims to provide payroll tax relief to businesses in response to coronavirus (COVID-19). It forms part of the Victorian Government's $1.7 billion economic survival and jobs package, which has been developed to help Victorian businesses and workers survive the devastating impacts of the coronavirus pandemic.

Three relief measures have been announced by the Victorian Government:
1.Waiving of 2019-20 payroll tax for eligible employers (announced on 21 March 2020)
- Employers with annual Victorian taxable wages up to $3 million had their payroll tax for the 2019-20 financial year waived.
- Eligible employers had to continue lodging returns but did not need to make further payments for the 2019-20 financial year.
- The State Revenue Office directly contacted eligible employers in relation to an emergency tax relief refund of payroll tax already paid in the 2019-20 financial year and they were able to claim the refund online.
- The eligibility threshold applied to each employer, so any member of a group that pays Victorian taxable wages of less than $3 million per annum was eligible for the relief.

2. Exempting additional payments under the JobKeeper program from payroll tax (announced on 5 May 2020)
- Any additional payments made to bridge the gap between an employee’s normal wage and the $1,500 per fortnight required to qualify for JobKeeper payments are exempt from payroll tax:
a) For employees who have come to an agreement with their employer to be stood down and not perform any work, the full $1,500 paid to them is exempt from payroll tax.
b) For employees paid less than $1,500 per fortnight, the payroll tax exemption applies to the difference between their wage and the $1,500.
- The additional payments are not included in rateable remuneration for the purposes of calculating WorkCover Premiums.
- Employers do not need to apply for this emergency relief measure.

3. Deferring 2020-21 payroll tax liabilities for eligible employers until the 2021-22 financial year (announced on 13 September 2020)
- Employers with Victorian payrolls up to $10 million, based on their 2019-20 financial year annual reconciliation returns, can defer their 2020-21 payroll tax liabilities until the 2021-22 financial year.
- This means they can pay their 2020-21 payroll tax liabilities in four quarterly instalments in the 2021-22 financial year:
a) Liabilities for July, August and September 2020 will be due on 7 September 2021.
b) Liabilities for October, November and December 2020 will be due on 7 December 2021.
c) Liabilities for January, February and March 2021 will be due on 7 March 2022.
d) Liabilities for April, May and June 2021 will be due on 7 June 2022.
- This deferral relief applies to each employer. This means membership of a payroll tax group is not considered in determining whether or not the member’s Victorian taxable wages for the 2019-20 financial year exceeded the $10 million threshold.
- To be eligible for this deferral measure, an employer must lodge their:
a) 2019-20 financial year annual reconciliation return.
b) Monthly payroll tax returns for the months of July 2020 through to June 2021.

Please visit the website for more information.