TAX NEWS - JUNE 2010

Australia New South Wales Tax: NSW budget to but payroll tax

Payroll tax cuts worth more than $300 million will be announced in Tuesday's NSW budget.

Treasurer Eric Roozendaal will lower the tax rate from 5.75 per cent to 5.45 per cent in a bid to encourage jobs growth, The Daily Telegraph says.

It will bring to $4 billion in six years the amount cut from payroll tax after it began at 6 per cent in 2008-09, the government said.

Mr Roozendaal said his cuts would lead to NSW Australia having its lowest payroll tax rate in 20 years.

The promise follows another in March by Opposition Leader Barry O'Farrell to drop payroll tax for the first 100,000 jobs created under a coalition government.

An already planned payroll tax cut from 5.65 per cent to 5.5 per cent will be brought forward to July 1 from its scheduled implementation date of January 1, 2011, and then the next cut will be implemented on January 1, 2011, taking the rate to 5.45 per cent.

The changes mean the state government will have cut payroll tax four times between the start of 2009 and 2011.

The payroll tax threshold will also rise to $658,000 from July 1, meaning any business with a payroll below this level - about 10 per cent of the state's businesses - will not have to pay.