Small businesses across the Territory are set to save tens of thousands of dollars with the CLP Government’s reforms to payroll tax now in effect.
From 1 January 2025, the payroll tax-free threshold has lifted to $2.5 million with Apprentice and Trainee wages also now exempt.
Specifically, amendments to the Payroll Tax Act 2009 now in effect includes:
- Increasing the tax-free threshold from $1.5 million to $2.5 million.
- Increasing the maximum annual deduction from $1.5 million to $2.5 million per annum, ensuring businesses with wages just above the tax-free threshold continue to pay an effective tax rate that steadily rises from 0% to 5.5% as the payroll of the business grows.
- Changing the rate above the tax-free threshold to $1 for every $2 in wages over the previous $1 for every $4, ensuring the annual deduction is reduced for businesses paying wages of $7.5 million and above.
- Introducing a new payroll tax exemption for wages paid or payable to apprentices and trainees.
Treasurer Bill Yan MLA said the reforms aimed to reduce tax for small business while supporting the employment and upskilling of local Territory workers.
“Our payroll tax reforms – the best in the country – will save local businesses an average of $22,000 annually and will abolish payroll tax altogether for 200 small businesses, meaning more money can be invested in apprentices and trainees,” he said.
“Territorians gave us mandate to reduce crime, rebuild the economy and restore our iconic Territory lifestyle.
“Key to rebuilding the economy, these payroll tax reforms are the first in 13 years and are set to position Territory businesses as the best place to thrive and help grow the economy.
“The money saved by small business through these changes can be reinvested into their business to better support additional employment and training outcomes for Territorians.
“These changes now make the Territory the best place to do business with the most generous tax-free threshold and annual deduction in the country.
“It sends a clear signal this Government is committed to supporting local business and attracting new employers to invest in the Territory.”
Businesses with wage bills between $2.5 million to $7.5 million will see their tax bill decrease from 1 July 2025.
To explore your eligibility or to learn more, visit treasury.nt.gov.au
