Article by Caroline Hong, which appeared in the July 2013 issue of the My Business magazine and also on MSME news network.
THESE REPRESENT A CLEAR WIN FOR SME OPERATORS.
NSW follows South Australia in payroll tax reform
The NSW 2013-14 Budget was handed down by the O’Farrell government in mid-June and it was encouraging to hear of some of the business initiatives contained therein that will directly benefit SME business owners in the state. One of the biggest plusses for SME business owners from this budget is a raft of changes to payroll tax.
Following the lead of the South Australian government, which recently reduced the payroll tax burden for businesses in that state by cutting in half the payroll tax on payrolls up to $1 million for a period of two years, the NSW government has raised the payroll tax threshold for business from $689,000 to $750,000, effective July 1, 2013. Businesses may be liable for payroll tax if their total liable wages exceeds the payroll tax threshold for that year. As well as increasing the efficiency of payroll tax, this one-off threshold increase will automatically save business owners into the thousands, with as many as 1,300 business owners no longer being liable to pay payroll tax.
In this budget the NSW government has also extended its Jobs Action Plan scheme to June 30 2015 while at the same time increasing the rebate from $4,000 to $5,000 for new jobs created after July 1 of this year. The rebate applies to the employment of an additional employee in a new job and will be paid in two parts – $2,000 at the end of the first year of employment, with the remaining $3,000 to be paid at the end of the second year of employment. For part-time employees, the rebate will be pro-rated based on full-time equivalent hours of employment.
“As the engine room of our economy, this Budget also provides support for small businesses to stimulate growth and jobs,” NSW Treasurer Mike Baird said in handing down the budget. “Payroll tax changes will provide tax relief to thousands of businesses, encouraging them to hire more people, while making payroll tax more efficient over the longer term. As an added measure to boost jobs, the NSW Government will also extend and increase the payroll tax rebate available under the Jobs Action Plan.”
While it’s often easy for business owners to treat any government announcement with token cynicism, these payroll tax reforms represent a clear win for SME operators in the state. The SMEAA strongly encourages every state government to support and enable its SMEs through initiatives such as payroll tax reforms.
On a different note, it is pleasing to hear Australia’s inaugural Small Business Commissioner Mark Brennan encouraging SMEs to join business organisations in his exclusive My Business columns (see page 6 of this issue for his latest). Mark’s vocal endorsement of business associations such as the SMEAA supports the very reasons why the SME Association of Australia exists – to support small and medium enterprises by helping them to connect, grow and prosper.
The SMEAA has made it easy for ambitious SME business owners to join as members online via our website, automating most processes to keep our membership fees affordable. As the inaugural CEO of the SME Association of Australia and having helping launch the SMEAA, Australia’s only business association dedicated to SMEs, with Founder Matt Johnson in October 2011, I am proud to see how far we have come in gaining a footprint in Australia and overseas. We are proud to announce more new services for members and our growing SME community. The SMEAA continues to respond to its growing membership, while also encouraging corporate companies that have products and services that would benefit SMEs to join us. Please don’t hesitate to get in touch to discuss how the SMEAA can help your business.
With acknowledgement and thanks to MyBusiness http://www.mybusiness.com.au
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My Business is the official publication of the SME Association of Australia http://www.smeaustralia.asn.au
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