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January 1 Payroll Tax cut to save NSW businesses $100 million in 2010

Illawarra’s largest business organisation, Illawarra Business Chamber, said Illawarra businesses would receive a payroll tax cut from 1 January reducing payroll tax bills for NSW business by over $100 million during the coming year.
The payroll tax cut from 5.75% to 5.65% is the second of three planned cuts to the payroll tax rate by the NSW Government, which resulted from a strong campaign by the Illawarra Business Chamber, in conjunction with the NSW Business Chamber.
Payroll tax applies to employing businesses that have a wages bill above a threshold of $638,000 (indexed to Sydney CPI).
“Payroll tax is a tax on jobs, and we are pleased to see the NSW Government honouring its promise to reduce the burden on business,” said Greg Fisher, CEO of Illawarra Business Chamber.
“Illawarra Business Chamber ran a hard fought campaign to deliver this tax relief to business and to help make us more competitive with Queensland and Victoria that have significantly lower payroll tax rates.  Victoria’s payroll tax rate is 4.95%.
“This cut will save business in NSW $100 million this coming year, and comes on top of the savings from the first cut from 6% to 5.75% last year. Businesses will receive additional tax relief when the final cut to 5.5% takes effect from 1 January 2011.”
Mr Fisher said that the total cumulative cut in payroll tax would save NSW businesses $1.9 billion over four years.