The Victorian government has announced it will cut payroll tax for small businesses and slash red tape for cafes, bars and restaurants.
During their visit to the Terminus Hotel, Premier Jacinta Allan, Treasurer Jaclyn Symes and Minister for Planning Sonya Kilkenny announced that from 1 July 2025, the payroll tax-free threshold will lift from A$900,000 to $1 million. This means that around 6,000 businesses will no longer pay payroll tax, and an additional 22,500 will pay a reduced amount, saving approximately $14,550 per year.
The payroll tax changes and the introduction of the Commercial and Industrial Property Tax reform are set to save Victorian businesses around $1.35 billion over the next four years.
“These planning changes are all about saving our local pubs, cafes and restaurants time and money and letting them focus on what they do best – serving great food, creating local jobs, and bringing people together,” Minister Kilkenny said.
This follows lifting the threshold from $700,000 at the start of the financial year.
The Allan government has also announced changes to make it easier to open a restaurant serving alcohol and expand outdoor dining.
Businesses will no longer need approval from local councils and Liquor Control Victoria (LCV).
They will only need to obtain the latter, slashing the time it takes for venues to get a liquor licence, allowing businesses to open up to six months earlier and save around $7,000.
Temporary changes made during the pandemic to remove planning permits for outdoor dining will also become permanent, building upon Victoria’s tax reform to abolish stamp duty upfront costs and replace it with a more efficient Commercial and Industrial Property Tax.
The reform will make it easier for businesses to set up and move in, creating 12,600 jobs and boosting the Victorian economy by up to $50 million over the next 40 years.
The changes have been earmarked since 2023.
In the Victorian 2025/26 budget, $627 million was invested to support businesses and grow the Victorian economy.
Despite the positive changes for businesses, the move comes with forecasts of record-high levels of debt, and Allan concedes that some calculations will be required.
Related content
