Living in a land of harmony – payroll tax on employee share and option payments

When the governments of Australia agree with the principle of harmonising laws, regulations and taxes watch out, because this is not the same as choosing the lowest common denominator of all of these.  In regard to share, option and other equity plans the tax bill will (is there any other way?) go up.

Last year we reported that, with effect from 1 July 2007, Victoria had extended payroll tax to the value of an employer’s contribution to grants of shares and options to employees, directors, former directors and current and former members of the governing body or deemed employees, as part of the process of ‘harmonising’ the Victorian and New South Wales payroll tax arrangements to reduce red tape for business (see HERE).

You will be reassured to know that the entire country is almost living in a state of harmony – with effect from 1 July 2008, Queensland, South Australia and Tasmania followed the New South Wales and Victorian model and extended the payroll tax net to cover employee shares and options under similar harmonisation arrangements.  The ACT and Northern Territory also introduced new harmonisation changes from 1 July 2008, although employee shares and options had previously been subject to payroll tax in those jurisdictions.  Western Australia also imposes pay-roll tax on employee shares and options. However, whilst New South Wales, Queensland, Tasmania and Victoria have moved towards harmonising their payroll tax systems, the harmonisation process has not extended to a uniform payroll tax rate or threshold. Differing payroll tax rates and exemption thresholds between the States may still favour some States and Territories over others.

We would love to give you a single web site reference to show you how our governments are reducing red tape.  But we cannot.  There is no single government web site resource that does this.  So further information on payroll tax can be obtained from the web site for the relevant jurisdiction – just Google ‘payroll tax’ and the State or Territory to find it.

© Guerdon Associates 2024
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