Payroll tax relief - Vacancies 24




Payroll tax relief

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Payroll tax relief

Some states and territories are offering support such as increased thresholds, waivers, and interest-free deferrals of payroll tax. The tax consequences of receiving this support will depend on how it is delivered.





Where payroll tax relief is provided as:

  • no payroll tax payable – the business will have a smaller allowable deduction in their tax return
  • a refund of the payroll tax paid – the allowable deduction for payroll tax will be less any refunds given.

There are no GST consequences on payroll tax relief provided by state and territory governments to small businesses.

Example 1 – Payroll tax relief

Abi operates a hairdressing salon. The state government introduces payroll tax relief for all small businesses to help them cope with the impacts of COVID-19. The relief is delivered as no payroll tax payable for the quarter April to June 2020.

As Abi received the payroll tax relief, she has a smaller allowable deduction in her 2020 tax return.

End of example

 

Example 2 – Payroll tax refund

Evan operates a backhoe and machinery hire business. The state government introduces payroll tax relief for all small businesses to help them cope with the impacts of COVID-19. The relief is delivered as a refund of the payroll tax paid for the quarter January to March 2020 and no payroll tax for the quarter April to June 2020.

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Evan pays payroll tax of:

  • $50,000 for 1 July to 31 December 2019
  • $25,000 for 1 January to 31 March 2020
  • $0 for 1 April to 30 June 2020.

Evan receives a payroll tax refund of $25,000 before 30 June 2020.

Evan’s allowable deduction for payroll tax in his 2020 tax return is $50,000 ($75,000 paid less the $25,000 refund).

There are no GST consequences on the payroll tax relief he receives.