NSW Payroll Tax Amendment (Jobs Plus) Bill 2021 Awaiting Assent

Tuesday 18 May 2021 @ 9.58 a.m. | Legal Research | Taxation

On 13 May 2021, the Payroll Tax Amendment (Jobs Plus) Bill 2021 (NSW) (‘the Bill’) passed through both houses of the New South Wales Parliament. The Bill is now awaiting assent. The Bill was introduced in the Legislative Assembly by Treasurer Dominic Perrotet (‘the Treasurer’) on 5 May 2021.

The Bill seeks to support the NSW Government’s Jobs Plus program, which the Treasurer described as “an incentive program to encourage more businesses to call NSW home”. Under the program, businesses can be eligible for a “complete exemption from payroll tax for up to four years for every new job created, provided that the business has created at least 30 net new jobs”. The Bill proposes amendments to the Payroll Tax Act 2007 (NSW) to give effect to this program.  

The Economic Situation in New South Wales 

In his second reading speech, the Treasurer outlined the economic situation in NSW. At the height of the COVID-19 pandemic, over 270,000 people in NSW lost their jobs. However, the Treasurer remained optimistic about the future of the NSW economy, stating that “the NSW unemployment rate has already fallen from a pandemic peak of 7.2% down to just 5.4%”. Furthermore, he confirmed that “at the time of the Half-Yearly Review, the economy was on track to recover to pre-COVID levels six months sooner than expected”.

The Treasurer referred to the Bill as one of the ways in which the NSW Government plans to help the state recover from economic effects of the pandemic. He said:

“Jobs are our top priority … Last year our budget took steps to restore jobs for the people of this State quickly and safely. We committed to short-term stimulus to kickstart the economy and we committed to removing the barriers to job creation to the greatest extent possible. One of those barriers is tax”.

Proposed Amendments: Jobs Plus Program

The proposed amendments to the Payroll Tax Act 2007 (NSW) are intended to “exempt wages of identified persons under the Jobs Plus Program from payroll tax”. If passed, the Minister for Jobs, Investment, Tourism and Western Sydney (‘the Minister’) would be authorised to enter into an agreement with an employer that “the employer is exempt from paying payroll tax on wages that are the subject of the Jobs Plus agreement”.

The Bill also seeks to provide provisions that will allow the Minister to revoke this tax cut under certain circumstances.

Proposed Amendments: Aged Care

Additionally, the Bill also seeks to extend the payroll tax exemption currently in place for aged-care workers. Since the COVID-19 pandemic, there have been various rounds of “bonus payments” to fund retention bonuses for aged-care workers. By extending the payroll tax exemption, the Bill aims to ensure that “any future bonus payments under the program will also be exempt from payroll tax”. In his second reading speech, the Treasurer commented that this amendment would ultilmately help the government “keep older Australians safe from the virus and provide them with essential and quality health care”.

The Treasurer emphasised the NSW Government’s desire to recover from the pandemic by providing jobs to its people by stating:

“We will not allow State taxes to be a barrier to job creation, opportunity or to the quality care our older citizens deserve”.

He concluded his second reading speech by highlighting that the government seeks to:

“[cut] taxes to attract new employers to NSW to drive a strong recovery today and create better opportunities for the workers of today and tomorrow”.

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Payroll Tax Amendment (Jobs Plus) Bill 2021 (NSW), second reading speech and  other explanatory materials available on TimeBase's LawOne service

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