Victoria is a signatory of the 2010 Harmonisation Joint Protocol.
On 11 August 2023 the Victorian State Revenue Office issued a new revenue ruling which will effectively broaden the application of payroll tax to independent practitioners in Victoria. The ruling applies the relevant contract provisions to independent practitioners as it considers independent practitioners to be in a contract with the practice since they have been engaged by the practice to provide healthcare to patients from the practice’s premises. The ruling also considers a contract to include an agreement, arrangement or undertaking regardless of whether it was formal or informal, express or implied.
The 2023–24 State budget included a $200,000 increase to the payroll tax-free threshold, raising it to $900,000. The new threshold will be in place from 1 July 2024 and will further increase to $1 million the following year, bringing it closer to being in line with other states and territories.
Payroll tax threshold and tax rate
The payroll tax rate in Victoria is 4.85% for metropolitan employers and 1.21% for regional employers.
The annual threshold is $700,000. Monthly threshold is $58,333.
The threshold will increase from $700,000 to $900,000 from 1 July 2024.
From 1 July 2023, a temporary surcharge of 0.5% will apply on wages paid by employers over $10million annually. Employers with national payrolls above $100 million will pay an additional 0.5%.
Therefore, we will have to charge more for consultation if this payroll tax is going to be applied in future.
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