Source: Government of Western Australia
Here’s an important update from the office of State Revenue in relation to payroll tax for trainees and apprentices. If you need advice or are unsure how this may affect you, give us a call on 9791 5877.
The McGowan Labor Government has announced it will fund 9,600 training places in 2018 by closing a loophole that has seen companies avoid paying their fair share of payroll tax.
The McGowan Government will redesign the scheme over a two-stage process and initially redirect the savings into 9,600 training places. Stage two will explore a grant scheme for apprenticeships and traineeships that can be accessed by all businesses, not just those that pay payroll tax.
Effective from December 1, 2017, exemptions will be limited to all apprenticeships, and to traineeships undertaken by new employees earning no more than $100,000 per annum at the date of lodgement of the contract with the Department of Training and Workforce Development. The savings will be redirected to fund 43,350 training places over the forward estimates.
Existing worker contracts lodged before December 1, 2017 will continue to be exempt, providing the employee's annual wages do not exceed $100,000. Stage one will not alter the exemption for apprenticeships.
There is evidence to suggest that the exemption for trainees is not delivering value for money for taxpayers, and are instead used as a tax avoidance measure and are not targeting real skills gap in the economy.
The Government has recognised that the expenditure on this scheme, which equates to 2.4 per cent of the total payroll tax base, is unaffordable particularly when the payroll assistance provided by other States and Territories is far less generous.
This is why the Government will work with industry in developing stage two of these changes, to replace all remaining apprentices and trainee exemptions with a grant scheme. Options will be considered in mid-2018 for possible commencement from July 1, 2019.
A grant scheme will be a more transparent and equitable approach to helping employers provide staff training where it is most needed in the economy. A grant scheme would make assistance available to all businesses, not just those that pay payroll tax.
"We need a system which provides support for real training for real jobs and value for WA taxpayers,” Treasurer Ben Wyatt said.
"This new system will be a boost to small businesses as we work towards a grant system which is available to all businesses, not just those who pay payroll tax."