Payroll tax discount for regional businesses

Regional employer

You are a regional employer if:

• your principal place of employment is in regional Queensland
• and
• you pay at least 85% of your Queensland taxable wages to regional employees.

Regional employee

A regional employee is someone whose principal place of residence is in regional Queensland.

An employee’s principal place of residence is the residence in which they are considered to usually live having regard to:

• whether the employee occupies the residence on a daily and ongoing basis
• whether the employee has moved their personal belongings into the residence
• where the employee’s immediate family live
• how long the employee has lived in the residence
• the address the employee has their mail delivered to
• the employee’s address on the electoral roll
• the address recorded on the employee’s driver licence and/or other government-issued identification documents
• whether utilities (e.g. electricity, gas and phone) are connected to the residence and the accounts are in the employee’s name
• any other relevant matters.

Transient and temporary accommodation does not qualify as a principal place of residence.

Principal place of employment

Your principal place of employment is your registered ABN business address. This is your main business location recorded on the Australian Business Register. If you do not have an ABN, it is where your principal place of business is located. For the purposes of the regional employer discount, your principal place of employment must be in one of the listed areas.

Regional Queensland

• Cairns
• Central Queensland
• Darling Downs – Maranoa
• Mackay – Isaac – Whitsunday
• Queensland – Outback
• Townsville
• Wide Bay.

Claiming the discount

If you satisfy the eligibility criteria and select the regional employer rate discount in QRO Online when lodging a payroll tax return, the discounted payroll tax rate will be applied automatically.

Your eligibility is tested each time you lodge a return. If you do not qualify for the discount in some of your periodic returns, you might still meet the eligibility requirements in your annual or final return. If you use the discounted rate in some periodic returns but you are no longer eligible by the time you prepare a final or annual return, your payroll tax will be calculated at the standard rate.

If you are a member of a group, you can claim the discount if you are eligible and other members of your group are not. This means some members of a group of employers may have different rates of payroll tax.

For example:

• ABC Pty Ltd pays $3 million in Australian taxable wages. It is a regional employer and qualifies for the discounted payroll tax rate of 3.75%.
• DEF Pty Ltd did not claim the discount in some of their periodic returns. But when they prepared their annual return, their annual wages were over the threshold, making them eligible for the regional discount. In the annual return, they selected the regional employer rate discount for their entire annual wages.
• Company A and Company B are grouped for payroll tax. Their group pays $7 million in Australian taxable wages.
  • Company A is a regional employer. It will receive the regional discount and pay tax at the rate of 3.95%.
  • Company B is not a regional employer. It will not receive the discount, and will pay tax at the rate of 4.95%.

Also consider…

• Read about apprentice and trainee wages for payroll tax.
• Understand payroll tax rates and thresholds.
• Understand which payments are included as taxable wages.
• Know when to report a change in business conditions.
• Read about record keeping and other obligations.