The Treasurer of NSW the Hon. Dominic Perrottet MP has released NSW’s much anticipated state budget for 2020-21.
Building on the initial COVID-19 crisis response, this Budget sets out the NSW Government's commitment of $29 billion to "look beyond the present crisis and to lay the foundations for a prosperous post-pandemic future".
In this article we summarise the key impacts of the NSW Budget 2020 for small businesses.
The Key Impacts for Small Businesses
- Payroll tax-free threshold raised to $1.2 million: Increase in the payroll tax-free threshold from $1 million to $1.2 million.
- $1,500 voucher for small businesses: $1,500 voucher for small businesses that do not pay payroll tax to cover the cost of government fees and charges
- Jobs Plus Program: Aims to create or support 25,000 jobs and provides payroll tax relief to small businesses
Payroll tax-free threshold raised to $1.2 million
As part of their COVID-19 support measures, the NSW Government brought forward the increase of the payroll tax threshold to $1 million by one year.
This Budget announces a further permanent increase in the payroll tax-free threshold from $1 million to $1.2 million.
The Government will also cut the payroll tax rate from 5.45 per cent to 4.85 per cent from 1 July 2020 for two years.
These measures are part of the Government's aims to make it easier to run a business, and to support small businesses in rebuilding, attracting investment and creating jobs for the future.
$1,500 voucher for small businesses
Small and medium size businesses, which do not pay payroll tax, will be provided with $1,500 digital vouchers for the cost of government fees and charges.
Jobs Plus Program
As part of a new $250 million Jobs Plus Program, the NSW Government will provide payroll tax relief and other support to small businesses.
The Jobs Plus Program includes payroll tax relief, up to a four-year period, for every new job created where a business has created at least 30 new net jobs. It aims to create or support 25,000 jobs to 30 June 2022.
The program will also support companies who want to relocate their head offices to NSW or expand their jobs footprint in NSW.
Building upon changes introduced in COVID-19, the Budget includes an ambitious reform agenda.
To tackle what it calls an "inefficient" property tax system, over the coming months the Government will seek feedback from the public on a possible transition away from the current transfer duty and land tax system. The outcome of this transition would be lower barriers to home ownership, and a boost to long-term economic growth.
Find out more about the NSW Budget by heading to the NSW Government website. If you have any questions about the Budget or want to know more about how these budget measures impact your business, get in touch with your Client Director.