All Payroll Tax Rates and Thresholds Collated [2024/25 Updated]

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Everything you need to know about payroll tax

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.

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  • 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

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

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Tax Year Threshold Rate
1 July 2024 – 30 June 2025 $1.2 million 5.45%

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Tax Year Threshold Rate
1 July 2024 to 30 June 2025 - Metro $900,000 4.85%
1 July 2024 to 30 June 2025 - Regional $900,000 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.

Tax Year Threshold Additional Rate
1 July 2024 to 30 June 2024 $10 million or more 0.5%
1 July 2024 to 30 June 2024 $100 million or more 0.5%

 

 

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

 

Tax Year Threshold Additional Rate
1 July 2023 to 30 June 2024 $10 million or more 1%
1 July 2022 to 30 June 2023 $100 million or more 2%

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The current threshold is $1.3 million in annual Australian wages. 

Regional Queensland employers are entitled to a 1% discount on the payroll tax rate until 30 June 2030.

Tax Year Threshold Rate
1 July 2024 to 30 June 2025 $6.5 million or less 4.75%
1 July 2024 – 30 June 2025 More than $6.5 million  4.95% 

 

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

Tax Year Threshold Additional Rate
1 July 2024 to 30 June 2025 $10 million or more 0.25%
1 July 2024 to 30 June 2025 $100 million or more 0.25% (primary rate) + 0.5% (additional rate  )

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

Tax Year Threshold Rate
1 July 2024 to 30 June 2025 $1.5 million - $1.7 million 0% - 4.95% (Variable)
1 July 2024 to 30 June 2025 $1.7 million 4.95%

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A diminishing threshold will apply for employers or groups of employers with annual taxable wages in Australia between the annual threshold of $1 million and the upper threshold of $7.5 million.

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

Tax Year Threshold Rate
1 July 2024 - 30 June 2025 $1.25 million - $2 million 4%
1 July 2024 - 31 June 2025 $2 million and above 6.1%
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Tax Year Threshold Rate
From 1 July 2016 to current $2 million 6.85%

 

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Tax Year Threshold Rate
1 July 2024 - 30 June 2025 $1.5 million 5.5%

 

Note: From 1 January 2025, the Treasurer will waive payroll tax, for liabilities incurred between 1 January 2025 to 30 June 2025, for employers with 2024-25 taxable Australian wages of $2.5 million or less. Employers who are eligible for the waiver will still need to pay payroll tax liabilities incurred between 1 July 2024 to 31 December 2024.

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

New South Wales

Victoria

Queensland

South Australia

Western Australia

Tasmania

Australian Capital Territory

Northern Territory

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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 use 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.

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