As the rules stand now, once a business spends more than the $750,000 threshold on their employees’ salary, including superannuation, they are taxed 5.5 per cent on the excess.

Tamworth Business Chamber president Jye Segboer said increasing the threshold would provide instant relief to small and medium-sized businesses, particularly given the recent 3.5 per cent increase to the minimum wage.

“When you’re talking about a business that might employ 10 to 15 people, it doesn’t take long for businesses to be eligible for payroll tax,” Mr Segboer said.

“At 5.5 per cent, it’s almost the cost of another person’s job.”

NSW Business Chamber’s regional manager Joe Townsend said the $1 million threshold wasn’t just being thrown around because it was a nice round figure.

“We looked at the numbers across regional NSW, and the majority of businesses, over 80 per cent, don’t go over $1 million a year,” he said.

“In some cases, it costs more for businesses to report payroll tax, then it does to actually pay it. I know one business owner who had to pay $1000 in payroll tax, but to report it, it cost him $4000 to $5000.”

Mr Townsend said the chamber was pushing for an increased threshold, as “only large companies the size of Coles and Woolworths” would benefit from a rate reduction.