Canberra businesses to benefit from payroll tax changes


ACT Chief Minister Andrew Barr has announced $10,000 cut in payroll tax for Canberra businesses with a turnover of more than $2 million from July in a budget measure meant to support job creation.

The move was welcomed by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell as well as the Canberra Business Chamber. The initiative is part of a shift in the payroll tax threshold from $1.85 million to $2 million.

“The ACT government is committed to supporting small businesses by creating a fairer tax system that encourages growth, job creation and innovation,” said Mr Barr.

Canberra Business Chamber chief executive Robyn Hendry said that they support any increase in the threshold.

“Even if small businesses were to employ one or two more employees that would make a really big impact on our job growth, and [the shift] is a welcome incentive to encourage jobs growth,” said Hendry.

ASBFEO, Kate Carnell, said the ACT government continues to lead by example on payroll tax following the announcement the threshold will be increased to $2 million.

Carnell said the current threshold in the ACT of $1.85 million is already the highest in Australia, and lifting it even further will help small businesses in Canberra grow and thrive.

“The ACT government has been leading the way on this issue for a number of years now and by increasing the threshold to $2 million, more small-to-medium sized enterprises (SMEs) in the territory will now be exempt from paying payroll tax altogether,” Carnell said.

Carnell is urging other state and territory governments to follow the example set by the ACT on payroll tax, and in doing so, help reduce the regulatory and administrative burden on small businesses.

“Payroll tax is a significant growth inhibitor for SMEs. As I travel around Australia talking to small business owners as part of the ASBFEO’s current consultation process, payroll tax consistently comes up in conversations as one of the key issues holding businesses back,” Carnell said.

“I urge other state leaders and treasurers to do all they can to reduce the tax burden and create a system that ensures small businesses have every opportunity to expand their enterprise and hire more staff, creating sustainable local economies that contribute to the overall strength of the nation’s bottom line.”

“Small businesses are the engine room of the economy; they employ the majority of Australians, so it’s vitally important that governments at all levels support their growth and allow them to get on with the business of running their business and employing more people,” she said.