Victorian payroll tax shake-up to benefit hospo businesses
Tens of thousands of Victorian businesses are set to benefit from payroll tax changes and reduced regulatory requirements, with the state government implementing reforms from 1 July.
The payroll tax-free threshold will increase from A$900,000 to A$1 million, in a move that Premier Jacinta Allan says will ease the tax burden for about 28,000 businesses and exempt a further 6,000 from the tax entirely.
“Yes, this does require an adjustment to our budget and our revenue, but this is an investment in business and jobs and growth,” Allan said.
The measure builds on earlier reforms, which raised the threshold from A$750,000 to A$900,000 in July 2023, and comes as the government faces forecasts of record debt. Payroll tax is projected to be the largest source of taxation revenue for Victoria in the 2025–26 financial year.
Treasurer Jaclyn Symes confirmed the savings could amount to as much as A$14,500 per business. “That has obviously been something that we've factored in over the forwards [projections],” Symes said.
Hospitality and regional businesses respond
Bendigo restaurateur Paul Jarman, who operates four venues across Bendigo and Echuca, welcomed the continued support for the sector.
“Running a small business to medium business in Victoria is tough going at the moment, especially hospitality,” Jarman told the ABC. “So, it is much appreciated and will make some difference we hope.”
From 1 July, the government will also remove the need for planning permits for liquor licensing, with Liquor Control Victoria to take over the approval process from local councils.
Business Wodonga chief executive Graham Jenkin said the change would be particularly helpful for regional restaurants and cafes.
“This is great because Victoria really has more red tape than any other state government in Australia, so anything that can reduce red tape...” he said.
However, Jenkin warned that many small businesses would see no immediate benefit from the payroll tax changes.
“A lot of very small businesses will of course see no benefit from it,” he said. “It could be a subsidy of council rates... [or] less of the Victorian emergency services and volunteers fund levy…”
He called for additional measures, including regional mental health support and business training workshops.
Jonathan Jackson, 23rd June 2025
