Queensland Government doubles payroll tax rebate for businesses hiring apprentices and trainees


The Queensland Government will double the payroll tax rebate available to businesses that employ apprentices and trainees in a bid to make it more attractive for employers across the state to offer training positions.

Speaking during a budget estimates hearing on Tuesday, Queensland Premier Annastacia Palaszczuk said the state’s payroll tax rebate will increase for these from businesses, from 25% to 50%, for a period of 12 months, as of July 1 this year, reports the ABC.

To be eligible for the rebate, businesses must have a total payroll of more than $1.1 million, as Queensland employers with wage bills below that level are not liable for payroll tax.

“While apprentice and trainee wages are generally exempt from payroll tax, employers can claim the rebate based on the total exempt wages bill of any new apprentices or trainees they employ,” the Premier said.

Last financial year, approximately 2400 businesses in the state claimed the rebate, to the tune of more than $7 million. It’s expected the change to the rebate will double this figure.

Grant Field, managing director of MGI South Queensland and executive chairman of MGI Australasia, told SmartCompany the doubling of the rebate will “undoubtedly” be welcomed by Queensland businesses that are employing apprentices and trainees.

Field says the change will equate to a payroll tax saving of around $1200 per year for businesses employing apprentices that are earning around $50,000 a year. That compares to a payroll tax saving of around $600 when the rebate was set at 25%.

However, Field says it is important to remember “it is not a refundable rebate but rather a reduction of existing liability”, and contracts for apprentices and trainees will need meet certain criteria in order to be eligible.

“For example, they have to be registered under the Further Education and Training Act 2014 and the wages paid have to be in the course of the apprenticeship or traineeship,” he says.

Field also says the change will likely only affect a small number of businesses that are currently liable for payroll tax.

“The incentive is clearly designed to make it more attractive for businesses to hire apprentices and trainees,” Field says.

“However, there is no benefit unless and until the business hits the payroll tax threshold, for example, generally only when wages plus superannuation is more than $1.1 million.

“According to ABS statistics, only about 6% of businesses in Queensland have turnover of more than $2 million and only about 3% of businesses in Queensland have more than 20 employees. This suggests that this change will affect only a small number of businesses, for example, larger employers of trade-related employees.”

Field says employers such as group training organisations may also not be eligible for the rebate as these organisations are usually charities and therefore exempt from paying payroll tax.

Nevertheless, Field says the change is “a welcome announcement to relieve some of the payroll tax burden on larger employers looking to put on more apprentices and trainees”.


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