Payroll tax for Victorian Private Schools
Some Victorian private schools to lose payroll tax exemption from 1 July 2024
By Kathleen Jess, Senior Associate, Tax
The State Taxation Acts Amendment Act 2023 (Vic) received Royal Assent on 27 June 2023, removing the payroll tax exemption enjoyed by Victoria’s more expensive private schools.
The new legislation amends the Payroll Tax Act 2000 (Vic) to narrow the payroll tax exemption for private schools to those schools declared to be exempt by the Minister for Education (with the written consent of the Treasurer) by notice published in the Government Gazette. All private schools in Victoria with an income per student of less than $15,000 per annum have been declared exempt from payroll tax until 1 January 2029. Income per student is calculated based on fees, charges, compulsory levies and other income (the data for which is not available to the public), less fee reductions for scholarships and families suffering financial hardship.
Around 60 private schools with fees of $15,000 per annum or more will be non-exempt from 1 July 2024 despite their not-for-profit status. A small token of relief will be provided by the payroll tax threshold increasing from $700,000 to $900,000 from 1 July 2024 and then to $1 million from 1 July 2025, however, private schools with fees of $15,000 or more per student per annum should seek advice regarding their structure as early as possible.
