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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-08-30 Daily Xml
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Payroll Tax

In reply to Mr COWDREY (Colton) (29 June 2023). (Estimates Committee B)

The Hon. S.C. MULLIGHAN (Lee—Treasurer): I have been advised the following:

1. In 2021-22, there were around 10,300 ungrouped businesses liable for payroll tax in South Australia.

For payroll tax purposes, employers related or connected to each other are treated as a group. The relevant payroll tax thresholds and deductions are based on the combined Australian wages of the relevant group of businesses. There were around 7,400 grouped businesses liable for payroll tax in South Australia in 2021-22.

2. From July 2022 to May 2023, there have been around 8,800 ungrouped businesses that have reported a payroll tax liability. Some businesses with lower wages only report payroll tax liabilities on an annual basis. These businesses are not included in the number of businesses reporting a payroll tax liability in the year to May 2023. In addition, businesses undertake an annual reconciliation at the end of each financial year. The annual reconciliation process can impact the number of businesses with a payroll tax liability and had not been completed at the time this response was prepared. The number of grouped businesses liable for payroll tax can only be determined after the annual reconciliation process has been completed, however the number is expected to be similar to the previous financial year.

3. The expected increase in total payroll tax collections in 2022-23 compared to 2021-22 is $142 million, based on 2023-24 Budget estimates. The estimated increase in collections in 2022-23 reflects various factors including:

an increase in wages subject to payroll tax (through changes in both wages and employment levels); and

changes in the composition of payroll tax liable businesses, including potential changes to the grouping or structure of businesses.

Actual 2022-23 payroll tax collections will not be known until the full 2022-23 annual reconciliation data is available.

4. Payroll tax estimates are based on the last known year of payroll tax revenue adjusted for expected changes in economic assumptions such as employment, wages growth and hours worked, as well as compositional factors reflecting potential changes in the payroll tax base. Forecasts for the current financial year also have regard to year-to-date collections. As no specific projections for the number of businesses liable for payroll tax is required for revenue forecasting purposes, no such projection is available.

5. The breakdown of grouped businesses in each payroll bracket requested for 2021-22 are outlined below. It is based on the value of Australian wages for the business group, which are relevant for the calculation of payroll tax thresholds and deductions:

Total Australian wages Number of grouped businesses Payroll tax liability ($m)
$1.5m to $1.75m 400 9
$1.75m to $2m 400 17
$2m to $2.5m 600 28
$2.5m to $3m 500 27
Greater than $3m 5,500 1,358

Notes: Totals may not add due to rounding. The 2021-22 payroll tax liability does not include payroll tax revenue collected in 2021-22 related to prior year liabilities.


No projections of the number of businesses and associated wages in each bracket in future years have been undertaken. The total number of businesses in each bracket in future years are expected to be broadly similar, but will be impacted by factors such as:

wage growth;

the creation of new businesses;

winding up of existing businesses;

changes in the composition of employee numbers and/or wages within existing businesses liable for payroll tax; and

changes in the number of businesses within a payroll tax group.

6. Actual payroll tax revenue for 2021-22 was $1.461 billion. Actual 2022-23 payroll tax collections will be published in the 2022-23 Final Budget Outcome. The 2023-24 budget forecasts total payroll tax revenue in 2022-23 to be $1.603 billion.

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