Increase in the payroll tax-free threshold 
The Government announced it will bring forward increases in the payroll tax free threshold, which will increase from $650,000 to $700,000 from 1 July 2021.

Regional employer payroll tax rate
Reductions will also be brought forward in the regional employer rate for payroll tax. The regional employer rate is expected to reduce from 2.02 per cent to 1.2125 per cent from 1 July 2021.

Mental Health and Wellbeing Levy
There are plans to implement a Mental Health and Wellbeing Levy from 1 January 2022.  It will be administered via a payroll tax surcharge on wages paid in Victoria by businesses with national payroll exceeding $10 million a year. A rate of 0.5 per cent will apply for businesses with national payrolls above $10 million. Businesses with national payrolls above $100 million will pay an additional 0.5 per cent.

The surcharge rates will be paid on the Victorian share of wages above the relevant threshold with existing payroll tax exemptions for private schools, hospitals, charities, local councils, and wages paid for parental and volunteer leave expected to apply.