Budget Announcement

In the 2014/2015 federal budget the government announced that it intends to remove the payroll tax supplement paid to eligible aged care providers with effect from 1 January 2015.

Aged care providers are acting now to consider how the loss of the supplement will impact on their payroll tax liability (including how the amounts previously covered by the supplement will be funded from 1 January 2015) and taking steps to minimise their payroll tax liability.

Aged Care Payroll Tax Supplement

The payroll tax supplement has been paid to approved aged care providers in recognition of the unique costs associated with provision of aged care. The supplement is only paid in respect of care related staff (i.e. not all staff employed by an aged care provider e.g. head office or administrative staff).

The supplement is payable to approved residential aged care facilities only.

The supplement potentially provides a significant contribution to the payroll costs incurred by an aged care provider.

The abolition of the supplement means that aged care providers will need to fund to 100% of their payroll tax liability. This has the potential to significantly affect the cash flows of aged care providers.

What can operators do to manage their payroll tax exposure?

Aged care providers should act now to ensure that they are managing their payroll tax exposure including:

  • Considering whether there is any potential for degrouping of entities which have been grouped by the Office of State Revenue including making applications to the Commissioner of State Revenue for the degrouping of entities;
  • scrutinising the payroll tax assessment to determine whether the Office of State Revenue has correctly assessed the payroll tax liability; and
  • consider whether outsourcing provides better outcomes and costs.

Current Payroll Tax Thresholds

Click here to view the table.

What should you do?

 Please contact us if you have any queries regarding your payroll tax liability including registration, voluntary disclosure (if you are not registered), audits, degrouping etc.