Payroll Tax Amendment Act 2025

What this bill does

This bill eliminates payroll tax for employees on severance pay and other money received when their job ends permanently. Currently, employees pay payroll tax on termination payments, but this bill would reduce that rate to 0% starting July 1, 2025.

If passed (voted YES)

• Employees will pay no payroll tax on severance packages, redundancy payments, or other compensation when they lose their jobs
• Workers who are laid off or terminated will keep more of their termination money in their pockets
• Employers will still pay their portion of payroll tax on these payments - only the employee portion is eliminated

If rejected (voted NO)

• Employees will continue paying the current payroll tax rates on severance and termination payments
• Workers receiving redundancy packages or other end-of-employment compensation will see payroll tax deducted as usual
• The current payroll tax system remains unchanged for all termination-related payments

Who it affects

This primarily affects employees who lose their jobs and receive severance pay, redundancy packages, or other termination compensation. It provides financial relief to workers during the difficult period when their employment ends.