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The 2020 Payroll Tax annual reconciliation is available.
The due date for lodgement and payment of the 2020 annual reconciliation has been extended to 30 October 2020.
You're not required to make a payment or lodge a nil return for the months of July, August and September until 30 October 2020.
Lodge your annual reconciliation
If you have all the required information, it should take about 30 minutes to complete your annual reconciliation.
When lodging your 2020 annual reconciliation, you will need to include information about payments made to employees under the JobKeeper Payments scheme.
In NSW, an exemption from payroll tax is available for any additional payment amounts an employer makes to meet the conditions of this scheme.
When lodging your 2020 annual reconciliation, you will need to include:
To determine the total amounts, you'll need to calculate the liable and exempt amounts for each employee registered for the JobKeeper Payment scheme and add these together.
Please note, the liable amount also needs to be included in the ‘Salaries and wages’ field on the Wages details page of the annual reconciliation. You do not need to include the exempt amount anywhere else.
To qualify for the JobKeeper Payment scheme, employers must pay a minimum of $1,500 a fortnight to eligible employees. The payroll tax exemption is only available in situations where the employee would have received less wages or no wages if the employer did not receive the $1,500 JobKeeper payment for that employee. If an employee receives a wage greater than $1,500 a fortnight the whole wage amount will be taxable.
Example 1: Wages paid to the employee are part liable and part exempt
An employer normally pays an employee $1,000 per fortnight however, to meet the requirements of JobKeeper scheme, the employer is required to pay the employee an additional $500 per fortnight.
For payroll tax purposes, the $1,000 per fortnight would be liable and the additional amount of $500 per fortnight would be exempt.
If JobKeeper payments had been received for six weeks (three fortnights) during the financial year, when completing the annual reconciliation, the calculations would be:
| No. of fortnights x Normal wage = Liable component | No. of fortnights x ($1,500 – Normal wage) = Exempt component |
| 3 x $1,000 = $3,000 | 3 x ($1,500 - $1,000) = $1,500 |
Example 2: All wages paid to the employee are exempt
An employer pays $1,500 per fortnight under the JobKeeper Payment scheme to an employee that was not performing work and being paid a wage or had been previously stood down.
In this scenario, the full $1,500 per fortnight would be exempt from payroll tax.
If JobKeeper payments had been received for eight weeks (four fortnights) during the financial year, when completing the annual reconciliation, the calculations would be:
| No. of fortnights x Normal wage = Liable component | No. of fortnights x ($1,500 – Normal wage) = Exempt component |
| 4 x $0 = $0 | 4 x ($1,500 - $0) = $6,000 |
Example 3: All wages paid to the employee are liable
An employer normally pays an employee $1,500 per fortnight and is receiving a JobKeeper payment for that employee.
In this scenario the $1,500 per fortnight is liable for payroll tax and there is no exempt component.
If JobKeeper payments had been received for four weeks (two fortnights) during the financial year, when completing the annual reconciliation, the calculations would be:
| No. of fortnights x Normal wage = Liable component | No. of fortnights x ($1,500 – Normal wage) = Exempt component |
| 2 x $1,500 = $3,000 | 2 x ($1,500 - $1,500) = $0 |
Payroll tax customers whose total grouped Australian wages for the 2019/20 financial year are $10 million or less, will have their annual tax liability reduced by 25 per cent when they lodge their annual reconciliation.
When lodging your annual reconciliation, you will need to provide details of the wages paid for the entire financial year.
If you have used the Payroll Tax Monthly Calculator during the year to calculate your monthly liability, these figures will be available in the annual reconciliation and you can add the wage details for any missing months or update any existing wage details.
The 25 per cent reduction will appear on the calculation page of the annual reconciliation. You will also be able to see the reduction amount on the pdf available to you after you have lodged.
For customers that are or have been a member of a group during the 2019/20 financial year, you will also need to provide the group details of all group members in your annual reconciliation. When providing other group members wage details, be aware that they need to be separated into NSW wages and Interstate wages.
If you were a Non Threshold Claimer at any time during the 2019/20 financial year and your total grouped Australian wages were $10 million or less, you will need to provide Client ID’s and total wage details for all group members to claim the 25 per cent reduction.
Designated Group Employers
To claim the 25 per cent reduction, you will need to claim the threshold when lodging your annual reconciliation.
You can log in using your client ID and correspondence ID (from your most recent correspondence from us) – your correspondence ID is only valid for 12 months
To register to pay your payroll tax online, you need:
Make sure you have all the necessary details before starting the online form.
Declare other states where you employed.
Declare the number of apprentices and trainees you employed during the year.
Total interstate wages comprise wage components liable for payroll tax in the state or territory where the interstate wages are paid. Read more on interstate wages and how to determine which state or territory wages are paid.
If you’re a member of a group and are claiming the threshold, or you’re the nominated group single lodger, you also need:
If you’re not claiming the threshold, you must provide the NSW client ID of your designated group employer (DGE), if known. If not known, provide the DGE’s name.
For more information, read the grouping page.
Due to the announcement by the NSW Government to provide deferral arrangements for payroll tax customers, you are not required to make a payment or lodge a nil return for the months of July, August and September 2020 until 30 October 2020.
Our online calculator helps you to work out your actual monthly tax liability or provides the option to enter an estimate tax liability for the months of July to May.
If you have an annual tax payable amount less than $150,000 for the previous financial year, you can use the estimate calculation method to estimate your liability.
When you have determined your monthly tax payable, make the payment by the due date or let us know if it’s a nil liability.
Your monthly payment or ‘nil return’ is due seven days after the end of each month, or the next business day if the seventh day is on a weekend or public holiday.
You can login to the calculator using your client ID and correspondence ID (from your most recent correspondence from us) – your correspondence ID is only valid for 12 months.
To use the actual wage calculation method, you'll need:
You will need:
For more information, read the checklist of liable and exempt items.
Total interstate wages comprise all those wage components that are liable for payroll tax in the state or territory where the interstate wages are paid.
If you’re a member of a group and are claiming the threshold, or you are the nominated group single lodger, you also need:
You can save the information entered and return to complete the form later.
If you had a payroll tax liability in NSW less than $150,000 in the previous financial year, you'll need to calculate your estimate using the following examples as a guide.
Example 1: Vanilla Pty Ltd employed for the full 2019/20 financial year (366 days as it was a leap year), with a total NSW payroll tax liability of $35,000.
| Calculation of estimate – existing taxpayer | Employed for all of the previous financial year |
|---|---|
| (Total tax payable in previous financial year x 1 + current rate*) / total number of days employed in previous financial year | (35,000 x 1.03) / 366 = 98.50 |
| Daily estimate x (366/12) | 98.50 x (366/12) = $3,004 |
| Monthly estimate for July – May | $3,004 |
Example 2: Strawberry Pty Ltd began employing in Australia on 1 October 2019 and, therefore, only employed for 274 days in the 2019/20 financial year. Their total NSW payroll tax liability for the previous financial year was $25,000.
| Calculation of estimate – existing taxpayer | Employed for part of the previous financial year |
|---|---|
| (Total tax payable in previous financial year x 1 + current rate*) / total number of days employed in previous financial year | (25,000 x 1.03) / 274 = 93.98 |
| Daily estimate x (366/12) | 93.98 x (366/12) = $2,866 |
| Monthly estimate for July – May | $2,866 |
*The current rate is 3%.
If you didn't have a payroll tax liability in NSW for the previous financial year, you'll need to have paid payroll tax for at least three separate months in the current financial year before you can use the estimate method.
Example 3: Chocolate Pty Ltd started employing in NSW as of 1 July 2020 and paid payroll tax of $6,000 in the current financial year for the months of July, August and September (a total of 92 days). They have decided to use the estimate method for the remainder of the financial year.
| Calculation of estimate – new taxpayer | Payments paid for 3 months of the current financial year |
|---|---|
| Total tax paid in the current financial year / total number of days to which the paid payroll tax relates to. | 6,000 / 92 = 65.22 |
| Daily estimate x (366/12) | 65.22 x (366/12) = $1,989 |
| Monthly estimate for October – May | $1,989 |
Example 4: Caramel Pty Ltd started employing in NSW as of 1 August 2020 and paid payroll tax of $15,000 in the current financial year for the months of August, September, October and November (a total of 122 days). They have decided to use the estimate method for the remainder of the financial year.
| Calculation of estimate – new taxpayer | Payments paid for 4 months of the current financial year |
|---|---|
| Total tax paid in the current financial year / total number of days to which the paid payroll tax relates to. | 15,000 / 122 = 122.95 |
| Daily estimate x (366/12) | 122.95 x (366/12) = $3,749 |
| Monthly estimate for December – May | $3,749 |
Once you've determined your estimate amount, you can enter and save the amount for a month, and/or for the remaining months of the financial year, in the monthly calculator. You can also schedule your direct debit payments.
Using the estimate option in the monthly calculator won't pre-populate your estimate amounts in your annual reconciliation at the end of the financial year.
The payroll tax rate is 5.45 per cent. From 1 July 2020, the threshold is $1,000,000. Your monthly threshold is calculated using the number of days in the month, divided by the number of days in the year, multiplied by the threshold.
The payroll tax liability if your NSW wages for the full month of July are $115,000.
| Calculation of threshold for period of employment | Monthly - full period |
|---|---|
(Number of days employing x threshold) / Number of days in the period | (31 x $900,000) / 366 = $76,230 If employing for less than a full month, |
| Calculation of employers tax payable for the period | |
| (Employers NSW wages - threshold for the period) x tax rate on the balance | ($115,000 - $76,230) x 5.45% = $2,112.97 |
The payroll tax liability if your NSW wages for the full month of April 2019 are $115,000 and interstate wages are $50,000. Making your total Australian wages $165,000.
| Calculation of threshold for period of employment | Monthly - full period |
|---|---|
(Number of days employing x threshold) / Number of days in period | (30 x $900,000) / 366 = $73,770 If employing for less than a full month, |
| (NSW wages x threshold) / Employer's total Australian wages | ($115,000 x $73,770) / $165,000 = $51,415 |
| Calculation of employer's tax payable for the period | |
| (Employers NSW wages - threshold for the period) x tax rate on the balance | ($115,000 - $51,415) x 5.45% = $3,465.38 |
The payroll tax liability if your business is grouped with another business for the full month of November 2018. Your NSW wages are $80,000, the other group members total NSW wages are $50,000 and the group’s total Australian wages are $200,000.
| Calculation of threshold for period of employment | Monthly - full period |
|---|---|
(Number of days employing x threshold) / Number of days in period | (30 x $900,000) / 366 = $73,770 If employing for less than a full month, |
| Calculation of threshold for period of employment | |
| (Total NSW wages of group x threshold) / Total Australian group wages | (($80,000 + $50,000) x $73,770) / $200,000 = $47,951 |
| Calculation of employer's tax payable for the period | |
| (Employers NSW wages - threshold for the period) x tax rate on the balance | ($80,000 - $47,951) x 5.45% = $1,746.67 |
If you employ apprentices or trainees and want to calculate the apprentice/trainee offset, you will need to do the following:
Information collected from you on the registration form helps us determine if you have a liability or entitlement. The information may be provided to third parties with your consent or as required or permitted by law. We will correct or update your personal information at your request. You can read our privacy page for more information.