Payroll tax is an inevitable reality that every business owner will have to face on a regular basis and its calculation can be a difficult task – especially if you have changes to staff on a regular basis or if your business is in a growth phase.
Payroll tax is also complicated further by the fact that there’s different threshold rates in each state. It’s important to make sure you know the specific thresholds and requirements for the state in which your business trades beforehand.
When it comes to calculating your payroll tax liability, there’s a variety of options to make sure you get it right.
Some accounting software including a payroll tax calculator, and some advanced software will even calculate your payroll tax liability based on the information you provide.
You can also calculate your payroll tax liability via various websites, including most of the official government-based websites. These websites can help you calculate, lodge and pay your payroll tax, whether it be your monthly commitment or your annual liability.
Payroll tax is self-assessed, so getting it right is vital. If you make an error, or consistent errors, you could face penalties or significant fines down the track.
In its simplest form calculating your liability entails subtracting any deductions you have (calculated on your Australian taxable wages) from your total state taxable wages, then multiply this amount by the current payroll tax rate in the state in question.
So for example, in Queensland the formula would be:
Total Queensland taxable wages – deduction x payroll tax rate = payroll tax liability.
Things get complicated if you trade in multiple states, or are part of a group. You should seek very clear professional advice when it comes to issues such as this as a group is considered a single entity for payroll tax purposes.
When it comes to payroll tax, the key thing is to make sure you’re prepared. Be prepared with calculators, be prepared by knowing your likely liability and be prepared to pay it when it’s due.
Payroll tax is an unavoidable part of your business – it’s very important to get it right.
To make the decision that’s right for you and your business, take advantage of the knowledge and expertise that we at i3Group are able to offer by giving us a call today on 1300 725 647.