Payroll taxes in Australia

Payroll taxes are state-based taxes on wages by businesses paid to employees. Whether your business needs to pay payroll taxes depends on your state or territory’s legislation in Australia.

However, all Australian businesses with employees must report ‘pay as you go’ (PAYG) withholding taxes. Payroller is the easiest Single Touch Payroll (STP) solution for self-employed, micro-employers and small businesses.

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Who needs to pay payroll tax in Australia?

Employers who pay wages above a certain wage threshold in a particular state or territory are required to pay payroll tax. Each state and territory has its own payroll tax legislation, rates, and thresholds. Payroll tax is calculated as a percentage of the total wages paid.

What are the consequences of not paying payroll tax?

Failure to pay payroll tax can result in penalties and interest charges being imposed by your relevant state or territory revenue authority. Legal action may be taken against the employer in serious cases. If you require further information regarding payroll taxes in Australia, it’s best that you contact your state or territory revenue authority or consult with a qualified tax professional.

Are there any exemptions or deductions available for payroll taxes in Australia?

Yes, there are some exemptions and deductions specific to a state or territory. Some states provide exemptions for specific types of wages or salaries like apprentices or trainees. Employers may also be eligible for deductions or rebates for certain activities, such as research and development or employing people with disabilities. Please see our table summary of state and territory payroll tax exemptions below.

How are payroll taxes calculated? When are payroll taxes due?

Payroll tax is calculated as a percentage of the total wages paid by an employer. The rates, thresholds and due dates of payroll taxes vary depending on the state or territory where an employer operates. Learn how to calculate payroll taxes for your small business with our tutorial. Payroll tax due dates are also specific to states and territories as per our summary.

How much is payroll tax? A payroll tax by state & territory

See our small business summary below of the different payroll tax rates and thresholds for each state and territory. We also include links to official government sources so you can check the most up-to-date payroll tax rates and legislation.

State/Territory	Current payroll tax rate	Threshold	Exemptions	Official government source
New South Wales (NSW)	The payroll tax rate for NSW is 5.45% from 1st July 2022.	The current payroll tax threshold for NSW is $1.2 million in annual wages.	Please see the Revenue NSW website for the full list of exempt wages and exempt employers	NSW payroll taxes from Revenue NSW
Victoria (VIC)	The current payroll tax rate in Victoria is 4.85%. Employers based in Victorian regional areas who pay at least 85% of their payroll to regional employees are eligible for a lower payroll tax rate of 1.2125%.	The current payroll tax threshold in Victoria is a monthly threshold of $58,333, the annual equivalent of which is $700,000 in annual wages.	Please see the Victorian Revenue Office’s website for the full list of exempt wages and exempt organisations	Victorian payroll taxes from the State Revenue Office Victoria
Queensland (QLD)	Queensland payroll taxes are set at 4.75% for employers who pay $6.5 million or less in Queensland taxable wages. However, the payroll tax rate increases to 4.95% for employers who pay more than $6.5 million in taxable wages. Until 30 June 2023, regional employers based in Queensland may be entitled to a 1% discount on their relevant rate.	The Queensland payroll tax threshold is $1.3 million in annual wages.	Please see the Queensland Treasury’s website for the full list of exemptions including for charitable institutions, exempt wages, exempt allowances and exempt leave.	Queensland payroll taxes from the Queensland Treasury
Western Australia (WA)	The minimum payroll tax rate is 5.5% for WA employers who pay over $1 million in annual wages. WA has a tiered payroll tax system dependent on an employer's taxable wages. WA payroll tax rates gradually increases to a maximum of 6.5%.	The Western Australia payroll tax threshold is $1 million in annual wages.	Please see the WA Department of Finance’s website for the full list of exemptions for organisations and types of exempt wages.	Western Australia payroll taxes from the WA Department of Finance
South Australia (SA)	Payroll tax rates in South Australia are not fixed. If an employer's total wages fall between $1.5 million and $1.7 million, the payroll tax rate varies between 0% and 4.95%. Revenue SA provides a payroll tax calculator on their website. However, if an employer’s total wages exceeds $1.7 million, a fixed payroll tax rate of 4.95% applies.	The South Australia payroll tax threshold is $1.5 million in annual wages.	Please see the official SA Revenue website for the full list of exemptions for organisations, exempt wages and non-liable wages.	South Australia payroll taxes from Revenue SA
Tasmania (TAS)	The payroll tax rate in Tasmania is 4% for employers with total annual wages over $1.25 million, and 6.2% for taxable wages exceeding $2 million.	The payroll tax threshold in Tasmania is $1.25 million in annual wages.	Please see the official State Revenue Office of Tasmania website for the full list of exemptions and exempt wages	Payroll taxes in Tasmania from the State Revenue Office of Tasmania
Australian Capital Territory (ACT)	The ACT payroll rate is 6.85% for employers with total annual wages over $2 million.	The payroll tax threshold in the ACT is $2 million in annual wages.	Please see the official ACT Revenue Office website for the full list of exemptions and exempt wages.	Payroll taxes in the ACT from the ACT Revenue Office
Northern Territory (NT)	The payroll tax rate in the NT is 5.5% for employers with total annual wages that over $1.5 million.	The payroll tax threshold in the Northern Territory is $1.5 million in annual wages.	Please see the official Northern Territory Revenue Office website for the full list of exemptions and exempt wages	Payroll taxes in the NT from the Northern Territory Revenue Office

Important payroll tax payment dates

Employers in Australia are generally required to pay payroll tax within seven days after the end of each month. If the seventh day falls on a weekend or public holiday, the payment is due on the next business day.

Payroll tax annual reconciliation deadline dates by state and territory

NSW (New South Wales) payroll tax due date: 28th July
Victoria payroll tax due date: 21st July
QLD (Queensland) payroll tax due date: 21st July
SA (South Australia) payroll tax due date: 22nd July
WA (Western Australia) payroll tax due date: 21st July
NT (Northern Territory) payroll tax due date: 21st July
Tasmania payroll tax due date: 21st July
ACT (Australian Capital Territory) payroll tax due date: 21st July

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