Government announces further payroll tax relief Finance Minister Joan Marie Aylward announced today payroll tax relief for businesses with annual payroll between $500,000 and $700,000. Effective from January 1, 2003, employers with payroll between $500,000 and $600,000 have been removed from the tax rolls. For employers with payrolls between $600,000 and $700,000 the exemption threshold will be phased down from $600,000 to $500,000. As a result of this measure, 160 employers will be removed from the tax roll and 120 employers will pay less tax. The remaining employers on the tax roll, those with payroll in excess of $700,000, will see no change in their payroll tax burden. "Employment is a priority for government," said Minister Aylward. "A higher payroll tax exemption threshold will allow businesses to invest more in their workforce, putting more Newfoundlanders and Labradorians to work, creating jobs and economic activity." This is the fifth increase to the exemption threshold since the 1998 budget. Prior to that budget, the exemption threshold was $100,000. Since that time the threshold has been increased by $500,000. Approximately 2,200 employers have been removed from the tax roll, and tax savings of around $9 million have been passed on to employers. The minister added: "Government has also committed to further reductions and the elimination of the payroll tax for all small businesses by the end of our next mandate, as our fiscal situation permits." Media contact: Josephine Cheeseman, Communications, (709) 729-0329. BACKGROUNDER Effective from January 1, 2003, employers with payroll between $500,000 and $600,000 have been removed from the tax rolls. Employers with payroll between $600,000 and $700,000 will receive a tax reduction. For the 2002 tax year, employers could deduct $500,000 from payroll when determining their liability for payroll tax. This is referred to as the exemption threshold. For 2003 and subsequent years, employers with payrolls up to $600,000 have an exemption threshold of $600,000. For employers with payrolls between $600,000 and $700,000 the exemption threshold will be phased down from $600,000 to $500,000: for every additional dollar of payroll between $600,000 and $700,000, the threshold will be decreased by a dollar. The table below shows how the phase down of the threshold will operate.
2003 03 27 3:45 p.m. |
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