The NSW Payroll Tax Incentive Scheme (PTIS) is offering eligible companies a five year payroll tax 'holiday' to invest and expand in select areas of the State.

PTIS is available to start-up businesses in their first year of operation, businesses wanting to relocate from interstate or overseas, and expanding businesses liable to pay payroll tax in NSW for the first time.

In 2006/07, the PTIS will be available in the following areas:

• Sydney (Fairfield, Liverpool, Bankstown, Canterbury, Camden, Campbelltown, Wollondilly)
• Richmond-Tweed (Ballina, Byron, Kyogle, Lismore, Richmond Valley, Tweed)
• Mid-North Coast (Bellingen, Clarence Valley, Coffs Harbour, Greater Taree, Hastings, Kempsey, Nambucca)
• Hunter (Cessnock, Lake Macquarie, Maitland, Newcastle, Port Stephens, Dungog, Gloucester, Great Lakes, Muswellbrook, Singleton, Upper Hunter Shire, Liverpool Plains Part B or formerly Murrurundi)
• Central Coast (Gosford, Wyong)
• Illawarra (Kiama, Shellharbour, Wollongong, Shoalhaven and Wingecarribee)

For the first three years, PTIS makes NSW a more competitive payroll tax option than Queensland for eligible companies with a wages bill of up to $14.4 million, and a more competitive option than Victoria for companies with wages up to $17.8 million.

Assuming average wages of $40,000, that’s companies employing up to 445 people.

The five year PTIS offers eligible companies:

• a full refund on NSW payroll tax to a maximum of $144,000 a year for three years
• a two thirds refund to a maximum of $95,904 in year four
• a one third refund to a maximum of $47,952 in year five.

A NSW company with a wages bill of up to $3 million will, under PTIS, be eligible for a full payroll tax refund for three years whereas a similar company would pay $127,000 a year in Queensland and $126,000 in Victoria.

While Queensland’s payroll tax system was set at 4.75 per cent with an exemption of $1 million, it uses a sliding scale threshold that leaves larger companies facing an expanding payroll tax burden.

In Queensland, for every $3 of wages over the $1million exemption threshold, the threshold is reduced by $1. So when wages reach four times the exemption threshold at $4 million, the deduction hits zero.

This means that a Queensland company with a $4 million wages bill pays payroll tax on the entire amount - a $190,000 slug. In NSW, the same company under PTIS would pay just $60,000 a year for the first three years.

As well as PTIS, the NSW Government through the Department of State and Regional Development provides a range of other assistance to help businesses establish and expand in Australia’s leading State.

To apply or find out more about the NSW Payroll Tax Incentive Scheme visit www.business.nsw.gov.au/ptis or telephone 1300 733 523 or email ptis@business.nsw.gov.au

For more on other NSW Government business development programs, visit www.business.nsw.gov.au