The Victorian State Government has announced the further reduction of payroll tax rates for businesses that are deemed regional employers and have expedited this by 12 months due to the COVID-19 pandemic. Your business qualifies as a regional employer if 85% or more of your Victorian taxable wages are paid to regional employees. A regional employee is a payee who performs more than 50% of their services in regional Victoria during any given month.
Based on these criteria and depending on factors such as where your business and your payees are located and perform their work, your business may be subject to the lower, regional payroll tax rate for all or part of the year. As this qualification process needs to be assessed at the end of the month/year you need to configure FastTrack to cover how and where your business operates. Therefore, FastTrack recommends the following in relation to setting the payroll tax rate for Victoria depending on the conditions that apply to your business as FastTrack360 only supports a single tax rate per state:
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- If the work locations of your payees are exclusively within regional Victoria set the Victorian payroll tax rate to the lower regional rate.
- If the work locations of your payees are exclusively or predominantly within the metro Melbourne area set the Victorian payroll tax rate to the higher metro rate.
- If the work locations of your payees are split between metro Melbourne and regional Victoria, set the payroll tax rate to the higher metro rate. At the end of each month you will need to determine whether the 'regional employer' criteria has been met based on the client location of active jobs during that month. If your business has qualified for the lower rate for that month, you may need to adjust the payroll tax liability for the corresponding period in your finance system as it will have been over-accrued in relation to your actual liability.
FastTrack have developed a report to help customers who fit into scenario 3 with a report to help with the determination of the month-end metro versus regional split for Victorian payroll tax liability. The report which is based off the Payroll Tax Detailed Export includes additional data to support classification of clients and payees as metro or regional, based on the postcode of the client's main address and the candidate main address respectively. If you require this report please raise a support ticket with FastTrack Client Services and they will work with you on its implementation.