Further Victorian Education Tax Details Released

29 June 2023

The Victorian Government has announced further details on the payroll tax being levied on non-government schools.

Non-government schools with income per student of more than $15,000 will be subject to payroll tax under laws that come into effect on 1 July 2024.

The vast majority of non-government schools, including all Christian schools, will remain exempt under the current determinations.  Only 60 schools come under the new provision that was foreshadowed in the Victorian Budget 2023/24.

The assessment of income takes into account the fees and charges that non-government schools levy all families. Fee reductions for scholarships and other financial relief to families in financial difficulty will reduce the schools’ average fees and charges.

Under the changes, the Minister for Education has determined the list of non-government schools to be declared exempt from payroll tax. These will be declared in the Government Gazette and listed on Department of Education and State Revenue Office websites.

The $15,000 threshold will be set in place until at least 1 January 2029 to give schools certainty when planning their budgets. New non-government schools opening between now and 2029 will also be assessed against the threshold.

The full list of exempted and non-exempt schools, and the details of the income calculation can be found here.

Despite no Christian schools being currently affected by the measures we remain implacably opposed to these changes.  As we indicated in our letter to Upper House opposition and cross-bench MLCs recently -

  • Claims that the changes ‘will align the payroll tax treatment of high-fee non-government schools with that of government schools’ are disingenuous.  For the government, this is just a book entry in relation to government schools.  If we all took that approach to paying income tax, collecting it ourselves, I doubt that the Australian Taxation Office would be too impressed.
  • The Premier describing these concessions as ‘a sweetheart taxation deal’ ignores the long-standing principle across all States that charities, including schools, are not burdened with payroll tax.  This proposal would effectively create two classes of Victorian charities, those recognised as serving the community along with their peers around the country, and those the Minister for Education determines are to be treated radically differently.
  • The walking back of these proposals by the Government mean no Christian schools will be impacted – but that is not the point.  Under the proposed legislation, the State Taxation Acts Amendment Bill 2023, all non-government schools will lose the exemption unless the Minister for Education determines otherwise.  The Minister may giveth, but the Minister can also taketh away – with no Parliamentary oversight or accountability.

We will continue our campaign to have this education tax removed.

 

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