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small business Health | April 07, 2020

JobKeeper payments must be exempt from payroll tax

The Nationals Member for Lowan, Emma Kealy is calling for the Federal Government’s $1500-a-fortnight JobKeeper payments to be exempt from Victoria’s payroll tax.

The unprecedented package from the Federal Government is a boost for the small businesses and workers most hard hit by the COVID-19 pandemic.

But Ms Kealy said without changes to existing Victorian law, these emergency relief payments will be subject to payroll tax.

“For many of our small businesses, this relief package will be the difference between staying open and keeping local people employed or closing their doors,” Ms Kealy said.

“Employers in Lowan who are keeping their workforce on during this crisis must have peace of mind they won’t be paying additional payroll tax on Federal Government JobKeeper payments.”

Victoria’s limited payroll tax relief for COVID-19 cuts out at just $3 million, compared to $10 million in NSW.

In some cases, where the businesses employ mainly juniors or those on lower wages, the JobKeeper payment will be higher than pre-existing wages. It is unfair that employers in that situation should now face a Victorian payroll tax bill for receiving Federal Government support.

“It’s critical this payroll tax exemption is on the agenda when Victorian Parliament next sits,” Ms Kealy said.

“If we do not make these changes, small businesses already hard hit by measures to stop the spread of COVID-19 will be hit again.

“The Federal JobKeeper support must not be an inadvertent tax grab for Victorian payroll tax.