Small businesses across South Australia will be ringing in the New Year with a major tax cut, as the Marshall Government delivers on a key election commitment to exempt them from paying any payroll tax – a saving of up to $44,550 a year.
The change, which takes effect today, will help stimulate the economy and abolishes payroll tax for the state’s 3,200 businesses with taxable payrolls of up to $1.5 million.
Premier Steven Marshall said businesses had been crying out for this important reform for years and it would make South Australia a far more attractive place in which to invest.
“At long last, South Australia’s small businesses have a government that listens to them and is prepared to make changes that will ensure they have more money in their pockets to reinvest into their operations to drive growth,’’ said Premier Marshall.
“By abolishing payroll tax for all small businesses, we are removing a major economic handbrake for them that will further stimulate the economy by encouraging them to create more jobs and employ more people.
“A further 400 businesses with payrolls between $1.5 million and $1.7 million will receive a welcome reduction in the amount of payroll tax they are required to pay through a phased-in approach.
“Ultimately, this is about sending a clear message that under the Marshall Government, South Australia is open for business.”
The Payroll Tax (Exemption for Small Business) Amendment Bill 2018 lifts the annual taxable wages threshold from $600,000 to $1.5 million.
Premier Marshall said provision had been made in the 2018-19 State Budget for payroll tax relief, with the reform expected to save businesses an estimated $44 million per year commencing from 1 January 2019.
“We were elected on a platform of more jobs, lower costs and better services for South Australians and we are delivering on that promise,’’ said Premier Marshall.
“This important tax cut is part of a suite of reform measures designed to stimulate economic growth and investment, including cuts to ESL bills for households and businesses and the creation of an additional 20,000 apprenticeships and traineeships over the next four years.”
“Small businesses are the backbone of our state’s economy and my government is committed to helping ease their cost base so they can grow, prosper and ultimately employ more South Australians.”
The State’s payroll tax receipts were $1.2 billion in 2017-2018.