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NSW payroll tax rebate for creating new jobs

Recently published in the August issue of The Strategist, Collins Hume outlines how NSW employers may apply to get a payroll tax rebate for employing more staff.

A new scheme by the NSW Government gives employers a payroll tax rebate of up to $4,000 per employee (equivalent to the annual payroll tax bill for one employee on an average wage).  So, if you added five new team members in new jobs that could be $20,000 less to pay in payroll tax over the next two years.  The rebate is paid on the first and second anniversaries of the team member’s employment and, as always, there are provisos:

• The new team member needs to be employed between 1 July 2011 and 30 June 2013 and also needs to maintain their employment for at least two years.
• Each new team member must be registered with the Office of State Revenue (OSR) within 30 days of the job starting.  
• The job must be a new job (not just a replacement or change in business structure or transfer of business).  At the time of registering the employee, you need to let the OSR know how many full time equivalent (FTE) staff you had prior to registering the new team member and maintain or increase that level of FTEs for two years to qualify for the rebate.   If the number of FTEs falls below the level required for the rebate for more than 30 days at any time during the year, the Chief Commissioner may refuse to pay the rebate.   
• The employer needs to be paying payroll tax and the employee’s wages need to be subject to payroll tax (no exempt employees).  Like any other special offer, the rebate cannot be used in conjunction with any other State Government scheme in relation to that employment.  So, if subsidies are already available for that job then the rebate will not apply.  
• The rebate amount cannot be more than the employer’s net payroll tax liability for the year in which the claim is made.

The rebate is available to full time, part time, and casual employees.  For part time and casual employees, the rebate is calculated on a pro-rata basis on the hours of employment.  The rebate is only available for the first 100,000 new jobs created under the scheme.  Of those 100,000 jobs, 40,000 are prioritised for non-metropolitan areas (find a listing on the Office of State Revenue’s website) and the rest in metropolitan areas.  You have nothing to lose by being a part of the scheme.  If you cannot maintain the level of employment required, then you either lose the rebate or will have to pay it back.

How to claim the rebate

Register your new employee on the Office of State Revenue website at http://www.osr.nsw.gov.au/taxes/payroll/job_scheme/information/ within 30 days of employment.  You will need to know how many FTE staff you have so phone Collins Hume on 02 6686 3000 for assistance with this calculation.  For full time staff (assuming you maintain the level of staff required) the first $2,000 is paid on the employee’s first employment anniversary and the second $2,000 on the second anniversary.