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.
- 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
- Paid maternity, adoption or primary carer leave
- Paid parental leave
Tax Year | Threshold | Rate |
1 July 2023 to 30 June 2024 | $1.2 million | 5.45% |
Tax Year | Threshold | Rate |
1 July 2023 to 30 June 2024 - Metro | $700,000 | 4.85% |
1 July 2023 to 30 June 2024 - Regional | $700,000 | 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 2023 to 30 June 2024 | $10 million or more | 0.5% |
1 July 2022 to 30 June 2023 | $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 | 0.5% |
1 July 2022 to 30 June 2023 | $100 million or more | 0.5% |
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.
Tax Year | Threshold | Rate |
1 July 2023 to 30 June 2024 | Above $1.3 million and less than $6.5 million | 4.75% |
1 July 2022 to 30 June 2023 | More than $6.5 million | 4.95% |
1 July 2023 to 30 June 2024 - Regional | Above $1.3 million and less than $6.5 million | 3.75% |
1 July 2023 to 30 June 2024 - Regional | 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 2023 to 30 June 2024 | $10 million or more | 0.25% |
1 July 2022 to 30 June 2023 | $100 million or more | 0.5% |
For employers or groups of employers exceeding $1.7 million, the rate is 4.95%.
Tax Year | Threshold | Rate |
1 July 2023 to 30 June 2024 | $1.5 million - $1.7 million | 0% - 4.95% (Variable) |
1 July 2023 to 30 June 2024 | $1.7 million | 4.95% |
Tax Year | Threshold | Rate |
From 1 July 2023 | $1 million - $7.5 million | 5.5% |
From 1 July 2023 | $7.5 million and above | 5.5% |
For businesses with total Australian taxable wages above $2 million, the rate is 6.1%.
Tax Year | Threshold | Rate |
1 July 2023 - 30 June 2024 | $1.25 million - $2 million | 4% |
1 July 2023 - 31 June 2024 | $2 million and above | 6.1% |
Tax Year | Threshold | Rate |
From 1 July 2016 to current | $2 million | 6.85% |
Tax Year | Threshold | Rate |
1 July 2022 - 30 June 2023 | $1.5 million | 5.5% |
We recommend you refer to your relevant state revenue office website for more information:
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.