Will you benefit from Geelong payroll tax cut?

The payroll tax is being reduced 25 per cent.

Plans to reduce payroll tax in regional Victoria following the state's 2017-18 Budget are expected to provide significant benefits to hundreds of businesses in Geelong and the broader Barwon region.

The Andrews Labor government announced in May that the payroll tax would drop 25 per cent – from 4.85 to 3.65 per cent – giving organisations in regional Victoria the lowest tax rate in the country.

"A 25 per cent reduction in payroll tax for regional Victorian businesses will boost local economies and grow jobs."

According to the state government, approximately 4,000 Victorian businesses will benefit in total, with job creation and regional growth at the top of the agenda. Specifically, 800 businesses in Geelong and the Barwon region will take advantage of the cuts.

"This tax cut will be a massive boost for Geelong, and will help local businesses do what they do best – building their businesses and create local jobs," Christine Couzens, member for Geelong, said.

Other payroll changes on the horizon

Treasurer Tim Pallas echoed Ms Couzens' comments, saying that every region should be allowed to share in the state's economic success.

"A 25 per cent reduction in payroll tax for regional Victorian businesses will boost local economies and grow jobs."

From 1 July this year, the payroll tax-free threshold will rise to $625,000, with a further jump to $650,000 from 1 July 2018. The Victorian government hopes the changes will enable organisations to save as much as $48 million in costs.

Furthermore, a growing number of small businesses can choose to make payroll tax payments on an annual rather than monthly basis. The annual payment threshold will therefore rise from $10,000 to $40,000, which will reduce bureaucracy and improve cash flow flexibility for many regional firms.

Payroll tax and WMC Accounting. Victoria is delivering a range of new policies to reduce red tape in the state.

Reducing red tape in Victoria

The policy is part of a wider drive from the Victorian government to cut red tape. On 26 May, politicians sought feedback on the Draft Small Business Regulation Review (Retail Sector) Action Statement – a piece of legislation designed to reduce the regulatory burden on SME retailers in the state.

The document outlines four key areas of reform:

  • Simplifying processes to identify resources for starting and growing a business;
  • Lowering approval times;
  • Reducing the complexity of food safety regulation compliance; and
  • Making retail leases fairer and more understandable.

"We know that small businesses are the backbone of our economy and we want to hear what they have to say and find out how we can help them grow, support the economy and create jobs," said Minister for Small Business, Innovation and Trade Philip Dalidakis.

Are you starting or growing a small business in Geelong? Please get in touch with the WMC Accounting team to learn more about our business advisory services.

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