How are you managing the Mental health and Wellbeing Surcharge increase?

Mental health and wellbeing surcharge

The mental health and wellbeing surcharge (surcharge) is a revenue mechanism that will provide a consistent and dedicated source of additional funding for the mental health system.

This was one of the Royal Commission's recommendations, and the Victorian Government has agreed to implement all of the Royal Commission's recommendations.

Every dollar received will be spent on the delivery of mental The surcharge charge will begin in January 2022 and is payable on taxable wages paid or payable by an employer or a group of employers from January 2022.

The surcharge is charged at the same time as payroll tax. As a result, if you pay monthly payroll taxes, you will also have to pay the surcharge monthly, and if you pay yearly payroll taxes, you will have to do so as well. You won't have to file a separate return.

here's a useful link for some FAQ to go even deeper if you feel the need Read the surcharge FAQs

Who pays the surcharge?

If you pay taxable wages in Victoria and your Australian earnings exceed the first annual threshold of $10 million, with a first monthly threshold of $833,333, you must pay the surcharge.

If you pay Victorian taxable salaries and your Australian wages exceed the second annual threshold of $100 million, plus a second monthly threshold of $8,333,333, you must pay an additional surcharge.

These criteria are intended to be used at the group level, rather than the individual. If you are a member of a group, these requirements must be met at the group level.

These yearly limits change proportionately if you do not operate for a full financial year. The following annual thresholds apply from 1 January 2022 until 30 June 2022 (transitional period)

Wages that are subject to the Victorian payroll tax, as well as any wages not taxed by payroll (such as pay or benefits paid to a caregiver who is away from work for primary or secondary caregiving leave or who is absent from work to volunteer as a firefighter or respond to other emergencies) will be exempt from the surcharge.

How much is the surcharge?

The company will charge an additional tax of 0.5% on your taxable earnings over $10 million, and an extra 0.5% on taxable earnings over $100 million. For the transitional period, each annual threshold is set at $5 million and $50 million.

These levels apply at the group level and are claimed by the designated group employer if you are a member of a club or association. These limits are adjusted proportionately if you're an Australian company that just does payroll for part of a year, or if you're also responsible for paying employees in another Australian jurisdiction.

The question is, How are you managing the Mental health and Wellbeing Surcharge increase?