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Will your second business be grouped for Victorian payroll tax?
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Overview
A new venue or acquisition can lift payroll tax across your whole business group. Check the combined wage bill before you commit to a lease or another hire.
Look at the connections between businesses
A second company can have its own bank account, payroll and ABN and still form part of the same payroll tax group. Before you price a new site or put an offer on a competitor’s business, check what the combined wage bill would look like. A forecast built one company at a time can understate the cost of the deal.
Victoria’s grouping rules can link businesses through related corporations, common control or employees who work across businesses. Picture two venues that share a manager. The second venue has its own payroll, but the manager recruits and rosters staff for both. That working arrangement belongs in the assessment alongside ownership and voting rights.
A group generally shares one tax-free threshold. Australian taxable wages across the group matter, including relevant interstate wages. In Victoria the deduction phases out as total annual Australian taxable wages rise from $3 million to $5 million. At $5 million there’s no deduction. Interstate wages and part-year employment can also change the Victorian calculation.
Price the next hire with both payrolls in view
Export wages by employing entity and state. Add proposed hires, expected start dates and taxable wage components such as employer super contributions. Then compare the group’s projected payroll tax before and after the expansion. That difference belongs in the budget for the new site.
Victoria allows applications for exclusion from some kinds of grouping. Eligibility depends on how the businesses are connected and operated.
