Payroll tax relief will be delivered up to 12,000 WA businesses, providing a stimulus to the WA's economy and supporting new jobs.
As part of the $170 million payroll tax package, the payroll tax exemption threshold will be increased by $150,000 over the next two years.
Currently, WA businesses with Australia-wide payrolls of up to $850,000 are exempt from payroll tax.
The annual threshold will be increased to $950,000 from January 1, 2020, and again to $1 million from January 1, 2021.
Raising the payroll tax threshold will result in around 1,000 businesses in WA no longer being liable for any payroll tax, while also cutting payroll tax liability for an additional 11,000 businesses.
Reducing the payroll tax burden on Western Australian small and medium businesses will lower the costs associated with the hiring of additional staff, and provide an opportunity for those businesses to reinvest.
These changes will also bring WA's payroll tax regime more into line with those in other states.
Premier Mark McGowan said this payroll tax cut reflected the government's commitment to growing WA's economy, supporting small business and creating more jobs,
Vasse MLA Libby Mettam welcomed the tax cut, saying there had been a tough community campaign to support small businesses which were increasingly doing it tough.
"This will have a significant impact on many local small businesses in the central business district who have been doing it tough. Reducing payroll tax will help create jobs and be an economic boost across WA," she said.