Scrapping payroll tax for small businesses

What we’ll do

A Marshall Liberal Government will scrap payroll tax for all small businesses in South Australia.

We will do this by exempting businesses with taxable payrolls of up to $1.5 million from paying any payroll tax, removing this tax for businesses employing an average of 25 employees.  

This will benefit more than 3,500 South Australian small businesses and will give confidence to more than 135,000 micro-businesses and sole traders who can create more jobs knowing that they won’t be hit with an extra tax as soon as they employ additional South Australians.

Our reform will reduce the payroll tax paid by small and some medium businesses by an estimated $44.5 million per year, incentivising them to create thousands of extra jobs for South Australians.

We will introduce the measure in our first budget so that small businesses can begin to benefit from 1 January 2019.

Why we’re doing it

South Australian businesses are doing it tough, operating under some of the highest cost structures in Australia, and in some instances the world.

South Australia’s $1.2 billion annual payroll tax take remains one of the most uncompetitive in the nation. The tax-free threshold on payrolls is the lowest in the nation under Labor, which also maintains a complex regime for calculating liabilities.

Quite simply, this is a tax on jobs and, in an economy that is reliant on small and medium businesses, we cannot expect employers to grow and create more jobs if government is constantly adding to their cost base, and especially to the cost of employing South Australians.

At a time when South Australia needs more jobs, greater investment and stronger growth, an uncompetitive payroll tax regime only serves to undermine confidence and make the situation harder for businesses to create jobs and employ more South Australians.

That’s why we will remove this disincentive to businesses creating more jobs and employing more people, making South Australia a more attractive place to invest in and grow businesses.