More than 80 per cent of people in work will receive a reduction in their payroll tax bills from next month, after senators passed legislative amendments.

The Payroll Tax Amendment Act 2024, brought to the Senate on Wednesday by Arianna Hodgson, the junior finance minister, will modify the Payroll Tax Act 1995 to change the applicable dates for a new hire payroll tax waiver for exempted companies.

Under the existing legislation, the new hire waiver only applies to those hired between April 1, 2018 and March 31, 2024, and when the hiring increases the employers total number of full-time employees.

The amendment allows those hired between that period and March 31, 2026 to be included under the waiver, and extends the benefit to those who started work after April 1, 2022, and continue to be employed after April 1 this year until March 31, 2026.

The benefit would not be extended for those hired before April 1, 2022.

Douglas De Couto, the shadow finance minister, asked: “Do we see a need for having a continuous rolling new-hire relief to always stimulate starting up businesses … without having to come back every two years to revisit legislation?”

Ms Hodgson confirmed, in response to another question from Dr De Couto, that the relief only applies to businesses that have a payroll of $500,000 or more. He said there may be small businesses looking to hire an extra member of staff.

Ms Hodgson said: “The relief is applicable to all businesses with annual remuneration of $500,000 or more, I do appreciate his comments but that is the policy decision at this time.”

Ms Hodgson added: “These decisions were based on the economic realities of today. We would likely revisit to see whether or not it is something that needed to be extended. It is a policy matter for the Minister of Finance himself.”