Victorian State Budget 2024-25 – Payroll tax measures

In light of cost-of-living pressures, Victoria's 2024-25 State Budget brings few taxation measures and more focus on healthcare and education funding.

Targeted payroll tax measures for small businesses

The Victorian Government made no new announcements, but confirmed the previously announced incremental increases to the Victorian tax-free threshold from $700,000 to:

• $900,000 from 1 July 2024; and
• $1 million from 1 July 2025.

This measure is targeted towards small businesses who may no longer need to pay payroll tax.

Conversely, the Government expects that payroll tax revenues will continue to be supported by large businesses through the phase out of the tax-free threshold amounts from 1 July 2024:

• businesses with payrolls exceeding $3 million – the tax-free amount will reduce for each dollar of wages over $3 million; and
• businesses with payrolls exceeding $5 million – no tax-free amount will apply.

Payroll tax revenues have increased year on year due to a strong labour market, as well as the introduction of the COVID Debt Levy and Mental Health and Wellbeing Levy. The Government expects the average go-forward payroll tax revenue growth to be 4.8% per year.

Medical centre business compliance

Victorian medical centre businesses remain in the dark about any potential amnesty program to voluntarily disclose historical non-compliance following the release of Revenue Ruling PTA 041 – Relevant contracts – medical centres.

Nevertheless, medical centre businesses should consider their compliance obligations and make a disclosure to mitigate penalties/interest that could arise from State Revenue Office audit or review.