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Victoria still beating NSW in payroll tax race

Illawarra’s largest business organisation, Illawarra Business Chamber (IBC), has called for further cuts to NSW’s payroll tax rate following a Victorian commitment to cut their rate to 4.85% from 1 July next year.

NSW’s payroll tax rate stands at 5.5% compared to 4.9% in Victoria. NSW’s payroll tax rate will be 5.45% from 1 January 2011 and Victoria’s 4.85% from 1 July 2011.

Last month, the IBC called for the NSW Government to reduce payroll tax to 4.95% by 2015 as part of its “10 Big Ideas to Grow Illawarra” campaign – which can be accessed at

“Victoria is making a concerted bid to be the first place to do business in Australia – that is a title that should belong to NSW,” said Greg Fisher, CEO of Illawarra Business Chamber.

“Over the last three years, the NSW Government has cut NSW’s payroll tax rate from 6% to 5.5% and that has been warmly welcomed by the Illawarra business community but this is a competition in which Victoria refuses to stop and so must NSW.

“If we are serious about creating new jobs and making NSW the first place to do business in Australia then we need to get NSW’s payroll tax rate in line with Victoria’s rate.”

Mr Fisher said that an oppressive payroll tax rate is a disincentive for businesses to take on additional staff and is a tax on employment.

“Payroll tax is a tax on jobs. By lowering payroll tax we can encourage existing businesses to expand and new businesses to set up shop in NSW.”