All Payroll Tax Rates and Thresholds Collated [2023/24 Updated]

Payroll tax is a type of tax assessed on the wages that are paid or payable to your employees when your total Australian wages exceed the threshold amount.

As payroll tax is a state tax, each state or territory has different rates and thresholds for payroll tax. Certain states have weekly, monthly and yearly thresholds so it’s worth checking to ensure that you’re registering for payroll tax where necessary.

Recently, there have been efforts to harmonise payroll tax in Australia for greater administrative consistency for businesses that operate in multiple states and territories.

It’s also important to note that if you are a member of a group of employers, then the threshold is calculated based on the combined annual Australian taxable wages.

What’s Considered Taxable Wages?

• Wages, salary, commission, bonuses, allowances or other benefits
• Superannuation contributions
• Contractor payments
• Directors’ fees
• Payments to employees such as accrued annual leave or cash payouts for termination
• Value in kind payments
• Payments to employment agencies
• Fringe benefits
• Wages paid to sick or injured staff
• Employer contributions to employee share schemes
• Salary sacrifice arrangements
• Portable long service leave fund contributions
• Certain allowances and reimbursements to cover expenses

What’s Not Considered Taxable Wages?

• Paid maternity, adoption or primary carer leave
• Paid parental leave

What is Payroll Tax in NSW?

What is Payroll Tax in VIC?

The payroll tax rate in Victoria is 4.85% except for regional Victorian employers. For regional Victorian employers, the rate is 1.2125%.

In addition, there is also a Mental health and wellbeing surcharge applicable to employers with more than $10 million in Australian Taxable Wages. The first monthly threshold is $833,333.

Finally theres a temporary surcharge associated with Victorias COVID debt, and will be in place for 10 years from 1 July 2023.

What is Payroll Tax in QLD?

The payroll tax rate in Queensland is 4.75% for employers or groups of employers paying $1.3 million or less in Australian taxable wages.

For employers or groups of employers paying more than $6.5 million, the payroll tax rate is 4.95%.

Regional Queensland employers are entitled to a 1% discount on the payroll tax rate until 30 June 2023.

In addition, there is also a Mental Health Levy applicable to employers with more than $10 million in Australian Taxable Wages.

What is Payroll Tax in SA?

The payroll tax rate in South Australia is variable from 0% to 4.95% for total Australian taxable wages that exceed $1.5 million but not $1.7 million.

For employers or groups of employers exceeding $1.7 million, the rate is 4.95%.

What is Payroll Tax in WA?

The payroll tax rate in Western Australia is now 5.5% across the board for all employers or group employers with annual taxable wages in Australia of more than $1 million.

What is Payroll Tax in TAS?

The payroll tax rate in Tasmania has two thresholds. For businesses with total Australian taxable wages more than $1.25 million and less than $2 million, the rate is 4%.

For businesses with total Australian taxable wages above $2 million, the rate is 6.1%.

What is Payroll Tax in ACT?

The payroll tax rate in the ACT is 6.85% for employers or group of employers with total Australian taxable wages above $2 million per year or $166,666.66 per month.

What is Payroll Tax in NT?

The payroll tax rate in the Northern Territory is 5.5% for employers or group of employers with total Australian taxable wages above $2.5 million or $125,000 per month.

State Revenue Office & tax relief

Each state revenue office will have additional information and rules relief measures in relation to payroll tax such as exemptions.

We recommend you refer to your relevant state revenue office website for more information:

Key Takeaways

Given that payroll tax is a state level tax, employers must ensure that they review and understand their obligations around registration and payment of payroll tax with the relevant state revenue offices.

Employers that operate in multiple states and/or territories must ensure that they conduct the right due diligence on their total taxable Australian wages to avoid neglecting for payroll tax.

Failure to register and pay payroll tax usually result in financial penalties and interest.

Businesses that deploy Employment Hero Payroll as a solution to track and measure their payroll tax ultimately have little problems with payroll tax and are made aware of their obligations as soon as their business (or group of businesses) reaches the threshold.

To find out how Pay Cat can help you with transitioning to a cloud payroll that helps you automatically calculate payroll tax solution, get in touch with us today.