As part of this month's State Budget, the NSW Government will lift the payroll tax threshold from the current level of $750,000 to $1 million by 2021-22.
The threshold, the point at which companies start paying payroll tax, will rise to $850,000 in 2018-19, $900,000 in 2019-20, $950,000 in 2020-21 and $1 million in 2021-22.
Nearly 40,000 businesses will save up to $5,450 each in 2018-2019 and up to $13,625 per business in 2021-22.
"Business is the lifeblood of our economy and this Government is committed to ensuring that NSW is the best place to do business," NSW Treasurer Dominic Perrottet said.
"Businesses that consistently have payrolls over $1 million will save more than $120,000 over the next decade from the lifting of the payroll tax threshold, which is money that can be reinvested back into businesses."
Minister for Small Business John Barilaro said raising the threshold would take immediate pressure off businesses who are looking to grow and expand their workforce.
The NSW State Government also announced the Review of Payroll Tax Administration earlier this year. The purpose of the review, which is being led by the newly appointed Productivity Commissioner, is to reduce the administrative burden on businesses.
The increase to the payroll tax threshold means more than 5,000 businesses will no longer need to meet payroll tax compliance costs by 2021-22.
The Review of Payroll Tax Administration's consultation paper is currently available on the NSW Treasury website. NSW Treasury is seeking the views of stakeholders with final submissions due on 6 July 2018.
Go here to read the full media release
Go here to read NSW Business Chamber's summary NSW 2018-19 State Budget - What It Means For Your Business
Source: NSW Treasury