COVID-19 FIGHTBACK Push to clarify payroll tax issue
ANALYSTS are calling on the State Government to clarify the payroll tax treatment of “top-up” Jobkeeper payments as businesses resume paying the tax after a three-month holiday.
While the Government is understood to be considering the issue, a Townsville accountant says thousands of businesses need to know now so they can calculate payroll tax liabilities for April.
Carl Valentine of PVW Partners said businesses faced a worst-case scenario of paying the equivalent of almost 5 per cent of their wages bill in payroll taxes.
“It’s a silly thing that needs to be fixed,” Mr Valentine said.
The State Government has announced payroll tax refunds and holidays, which ended in March, to help businesses impacted by the coronavirus pandemic, while it is also providing payroll tax deferrals for six months from April.
The Federal Government has announced its Jobkeeper wage subsidies for employees of a minimum $1500 a fortnight to be paid via employers.
There is concern businesses face additional payroll taxes of hundreds of thousands of dollars because of “top-up” payments paid to employees in instances where they otherwise would have been paid less than the $1500 a fortnight. “PVW Partners advocates that to ensure the true intent of the Jobkeeper payments in keeping businesses in business and people off jobless queues, the payment should not give rise to additional on-costs to employers in the form of higher payroll tax liabilities and higher Workcover premiums,” Mr Valentine said. “With businesses about to start calculating their April 2020 payroll tax liabilities and with many April 2020 payrolls including JobKeeper top-up payments, clarity is urgently needed.”
According to Workcover Queensland, the Workcover premium will not apply to the Jobkeeper payments because it considers the payment to be a “top-up payment” and not a payment for work done.
Chamber of Commerce and Industry Queensland spokeswoman Amanda Rohan said the Government must ensure businesses were not hit with additional payroll taxes.
“Businesses have told us that in some instances the JobKeeper payments may be more than their employees’ wages, causing some businesses to pay higher payroll tax than they usually would,” Ms Rohan said.
The office of Treasurer Jackie Trad was approached for comment.