COVID-19 and payroll tax relief
As part of the Northern Territory Government’s Jobs Rescue and Recovery Plan Business Hardship Package, payroll tax relief is available for eligible businesses that can demonstrate substantial hardship due to the COVID-19 pandemic. The relief has been extended and is now available to 30 June 2021 for businesses that are still experiencing hardship.
What is hardship?
The Department of Industry, Tourism and Trade (DITT) (formerly the Department of Trade, Business and Innovation) has developed a Business Hardship Register. A business with an annual turnover of up to $50 million that can demonstrate a reduction in turnover of at least 30 per cent due to COVID-19 can apply to be included on the Business Hardship Register.
To be included on the Business Hardship Register, an initial assessment of eligibility will be managed by DITT and is a prerequisite for payroll tax relief. More information about the register and how to apply can be found at businessrecovery.nt.gov.au/businesses/business-hardship-package.
Importantly, businesses that are still experiencing hardship after 30 September 2020 will need to contact DITT at firstname.lastname@example.org and provide evidence of continued reduction in turnover. DITT can also be contacted on 1800 193 111.
You should know
- If you are in a payroll tax group for payroll tax purposes, you do not apply as a group to be listed on the Business Hardship Register. Each group member will need to apply and meet the hardship requirements individually to be listed on the register.
- The reduction in turnover of 30% and 50% is for the company as a whole across all of Australia and not just turnover relating to the Northern Territory.
Payroll tax deferral – extension of time to pay until 21 July 2021
The Northern Territory Government has extended payroll tax deferrals for registered employers until 21 July 2021 with:
- confirmed listing on the DITT Business Hardship Register
- total Australian taxable wages for 2019-20 of over $7.5 million
- a reduction in turnover of at least 50 per cent (rather than 30 per cent) due to COVID-19 when compared to the corresponding month or quarter in 2019.
Eligible employers may be able to defer payment of one or more monthly returns between March 2020 and June 2021 until 21 July 2021, provided returns continue to be lodged by the due date, hardship is still being experienced and evidence of a continued reduction in turnover is provided to DITT.
Payroll tax waiver – March 2020 to June 2021 returns
Payroll tax waivers are available for the March 2020 to June 2021 return periods for employers with:
- confirmed listing on the DITT Business Hardship Register
- total Australian taxable wages for 2019-20 of under $7.5 million.
Confirmation of eligibility and what happens next
To access payroll tax relief, an employer must ensure it is listed on the DITT Business Hardship Register and this listing is maintained.
Once your business has been listed on the Business Hardship Register, DITT will issue you with a business hardship certificate. To access payroll tax relief, you should immediately provide the certificate to the Territory Revenue Office.
Businesses that are still experiencing hardship after 30 September 2020 will need to contact DITT at email@example.com and provide evidence of continued reduction in turnover. DITT can also be contacted on 1800 193 111.
DITT is providing hardship certificates with a further concession period of 1 October 2020 to 31 March 2021 and then, subject to further evidence of a continued reduction in turnover, 1 April 2021 to 30 June 2021.
When available, eligible employers should provide the Territory Revenue Office with their updated certificate confirming continued eligibility to be listed on the Business Hardship Register. On receipt of an updated certificate, the Territory Revenue Office will confirm your eligibility for payroll tax relief and process payroll tax waivers or deferrals for the September 2020 return and subsequent monthly returns.
The Territory Revenue Office may contact you if further supporting documentation is required.
All employers MUST continue to lodge payroll tax returns through INTRA, the online lodgement portal, by the respective due dates. This will enable monthly waiver and deferral amounts to be processed.
Hardship register and paying payroll tax
- If the due date for a return occurs while awaiting your payroll tax relief application to be decided, you do not have to pay payroll tax for the current return. However, prior to the return becoming due, you will need to demonstrate a completed application was submitted to the Business Hardship Register.
- If your application for a waiver or deferral of payroll tax is not approved, all relevant circumstances will be considered to determine if interest or penalty tax will apply to your tax default. This includes circumstances that demonstrate a reasonable belief the eligibility requirements for payroll tax relief would be met.
Employers receiving the Australian Government’s JobKeeper payments for employees working in the Northern Territory will not have to pay payroll tax on those payments.
Declaring JobKeeper payments
A new ‘JobKeeper payments’ field has been added to the INTRA lodgement screen so registered employers can declare these payments when lodging their returns to ensure the payments are deducted from their gross wages.
Note: Wages declared in the JobKeeper payments field must first be declared in the 'gross wages' field.
JobKeeper payments and Australia-wide taxable wages
Australia-wide wages means the taxable wages paid across Australia. Whether a JobKeeper payment should be included in your Australia-wide taxable wages figure will depend on how these payments are treated in each state or territory. In the Northern Territory, any JobKeeper payments paid to your NT employees will not be included in your Australia-wide wages. However other states may treat JobKeeper payments differently.
If the JobKeeper payments you paid in another state or territory are taxable or partially taxable in that state or territory, those amounts are to be included in the Australia-wide taxable wages you declare in your NT annual return.
JobKeeper payments and other exemptions
Wages can only ever be claimed exempt once. For example, where you declare taxable wages under the workers compensation exemption, you cannot also then claim those same wages again under the defence force exemption. The same applies to wages declared in the JobKeeper payment field.
If you declare taxable wages as exempt in the JobKeeper payment field, you cannot claim these wages under another exemption category, such as the hiring resident employee exemption (HREE).
You have a resident employee (Employee X):
- you receive the JobKeeper payment of $1,500 from the Australian Tax Office that you pay to Employee X
- you declare this $1,500 in your gross wages fields and in turn declare it exempt in the JobKeeper payment field
- if you wish to also claim the HREE, you will only be able to claim the wages paid to other employees
- while you can still count Employee X in your 'number of resident employees' or 'number of relocated and replacement employees' fields, you cannot claim the wages for Employee X in the 'additional employees wages' or 'relocated and replacement employee wages' fields.
You can choose whether to claim the wages for the employees receiving JobKeeper payments under the JobKeeper payments exemption or a different applicable exemption category.
Other payroll tax relief
If your business does not qualify for payroll tax relief under the Business Hardship Package, and you are concerned about your ability to meet your continuing payroll tax obligations, you can contact the Territory Revenue Office to request outstanding amounts of tax to be paid in instalments. Flexible payments can be arranged over an extended period, at a concessional interest rate, where financial incapacity is demonstrated.
Last updated: 11 December 2020
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