Treasurer and Minister for Small Business, Innovation and Trade media release - 2 May 2017.
The Andrews Labor Government is substantially reducing payroll tax for the second Budget in a row to help business create jobs.
The Victorian Budget 2017/18 cuts payroll tax by bringing forward the timeline of last year’s tax cuts, and reduces payroll tax by 25 per cent for regional businesses to create more jobs in regional Victoria.
The payroll tax-free threshold will now increase to $625 000 as of 1 July this year, and to $650 000 from 1 July 2018, in a fast-track of changes set to save business up to $48 million and create new jobs.
As a result, about 38 000 Victorian businesses will benefit by up to $1 200 in each year that the threshold increases are fast-tracked. Of these, about 1 600 small businesses will stop paying payroll tax a year earlier.
In a massive boost to regional economies, the Labor Government will reduce the payroll tax rate by 25 per cent in regional Victoria – from 4.85 per cent to 3.65 per cent for all businesses operating mostly in regional Victoria, making it the lowest rate in the country.
This will slash costs for about 4 000 businesses, support companies in regional Victoria to grow, encourage job creation, and ensure every region shares in the benefits of the state’s economic growth.
The Government is also allowing up to 9 700 additional small businesses to opt for an annual payroll tax payment instead of monthly payments. Extending the annual payment threshold from $10 000 to $40 000 cuts red tape and increases cash flow flexibility for thousands of businesses across Victoria to choose annual payments.
Agri-businesses will also benefit, with the Budget removing insurance duty on agricultural products, making it cheaper for farmers to insure against crop, livestock and equipment damage.
The Government will also implement recommendations from the Small Business Regulatory Review, which will continue to remove cumbersome red tape, making it quicker and easier to start and grow a retail business.
Quotes attributable to Treasurer Tim Pallas
“We’ve cut payroll tax two years in a row to help business create thousands of new Victorian jobs.”
“We’re making sure that every region shares in our economic success – with a new regional tax cut that will help regional business grow, and encourage more businesses to set up shop and create jobs in regional Victoria.”
Quotes attributable to Minister for Small Business, Innovation and Trade Philip Dalidakis
“This tax cut for small businesses helps them do what they do best – building their businesses and create jobs for Victorians.”