Sydney businesses face not just inflation and rising wages—but also increasingly complex tax pressures. Between the frozen payroll tax threshold set by NSW and upcoming reforms around superannuation payments, there are several regulatory shifts that corporate leaders, medical practices, and high-earning professionals must understand to avoid unexpected liabilities.
What’s Changing
• Bracket Creep in NSW Payroll Tax
The payroll tax threshold in NSW has been frozen at $1.2 million since 2020.
Wages and employment costs rising with inflation are pushing more businesses into payroll tax territory—or deeper into liability—without any corresponding relief. (Source: Daily Telegraph)
• Unpaid Superannuation Reforms (Payday Super)
Proposed reforms require employers to pay superannuation contributions within seven business days of each payday, beginning 1 July 2026.
These changes aim to reduce the large amount of unpaid super currently owed by employers but also introduce additional administrative burdens for payroll systems. (Source: News.com.au)
Why It Matters for Sydney Businesses
• Increased Payroll Costs
Bracket creep means companies that used to be comfortably under the threshold may suddenly face higher payroll tax liability. That directly impacts cash flow and financial planning.
• Compliance Risk & Penalties
Failure to meet earlier super payment deadlines can lead to penalties, interest, and audit scrutiny. Labour hire and contractor arrangements are also under closer review by Revenue NSW.
• System and Process Overhaul Required
Payroll systems, accounting workflows, and HR coordination may need updating to handle more frequent super payments and detailed reporting.
• Financial Planning Pressure
Businesses will need more accurate forecasting and budgeting to manage growing payroll and super obligations.
What Sydney Businesses Should Do Now
✅ Review your payroll tax exposure and model different wage growth scenarios.
✅ Audit your super payment processes for timeliness and prepare for more frequent contributions.
✅ Upgrade payroll or accounting systems to monitor super obligations and automate reporting.
✅ Reassess workforce arrangements (especially contractors) to ensure proper classification.
✅ Seek professional advice ahead of July 2026 to reduce compliance risks.
How Boa & Co. Can Support You
At Boa & Co. Chartered Accountants, we help Sydney businesses navigate these regulatory shifts by:
- Forecasting payroll tax impacts under bracket creep and identifying liability thresholds
- Reviewing superannuation schedules to ensure compliance with the 2026 reforms
- Advising on process and system improvements to streamline payroll and reporting
- Helping manage compliance risks and avoid penalties through proactive planning
The Bottom Line
NSW’s frozen payroll tax threshold and the upcoming payday super reforms are not just policy talk—they’re real changes that will affect how Sydney businesses operate. Preparing early means less disruption, better budgeting, and stronger compliance.
📩 Contact Boa & Co. Chartered Accountants today for a tailored review of how these changes could affect your business:
📞 1300 952 286
📧 [email protected]
🌐 www.boanco.com.au
Stay compliant. Stay confident. Stay ahead.