Payroll tax changes mean fewer jobs: business

The State Government's planned changes to the payroll tax threshold will lead to businesses hiring fewer new employees and offering lower pay rises, according to a survey by WA's main business lobby group.

WA businesses with payrolls of more than $800,000 will pay more from July 1 next year because of a "gradual diminishing" of the payroll tax exemption threshold.

In its mid-year Budget review, the Government announced it had also deferred for a year the lifting of the tax-free threshold from $800,000 to $850,000.

The Chamber of Commerce and Industry WA survey of 600 businesses shows 84 per cent of respondents expect to be less profitable as a result of the changes, while 82 per cent say they will be less likely to increase staff wages and 81 per cent expect to hire fewer new employees.

Treasurer Mike Nahan said the Government would stick by its commitment to increase the threshold to $850,000 from next year.