Australia Payroll Tax Guide
Australian payroll tax. The guide covers: the payroll tax — the state-based tax — the payroll tax is the tax on the "wages" paid by the employer in each state and the territory; the payroll tax is imposed by the "states" and the "territories" (NOT the Commonwealth); the payroll tax is payable if the "total Australian wages" exceed the "threshold" for the state or the territory; the thresholds and the rates for the 2025-26 year: (a) the New South Wales — the "annual threshold" of $1,200,000, the "rate" of 4.55% on the wages above the threshold; the "monthly threshold" is the "apportioned amount" ($100,000 per month); the "regional payroll tax rate" of 0% (the "regional employer exemption" for the businesses with the wages below $1.2 million in the regional NSW); (b) the Victoria — the "annual threshold" of $1,300,000, the "rate" of 4.85% on the wages above the threshold; the "regional rate" of 4.25% for the employers with the "regional wages" of at least 85% of the total wages; (c) the Queensland — the "annual threshold" of $1,300,000, the "rate" of 4.75% on the wages above the threshold; the "regional rate" of 3.75% for the regional employers; (d) the Western Australia — the "annual threshold" of $1,000,000, the "rate" of 5.5% on the wages above the threshold; (e) the South Australia — the "annual threshold" of $1,500,000, the "rate" of 4.95% on the wages above the threshold; (f) the Tasmania — the "annual threshold" of $1,250,000, the "rate" of 4.0% on the wages above the threshold; (g) the Australian Capital Territory (ACT) — the "annual threshold" of $2,000,000, the "rate" of 6.85% on the wages above the threshold; (h) the Northern Territory — the "annual threshold" of $1,500,000, the "rate" of 5.5% on the wages above the threshold; the grouping of the related entities (the "payroll tax grouping") — the "grouped entities" (the "related entities" — the "corporations" under the "common control", the "trusts" with the "common beneficiaries", the "individuals" and the "entities" under the "common control") are treated as the "single employer" for the payroll tax purposes; the grouped entities must "share" the threshold (the "group threshold" — the single threshold for the group); the "grouping" rules prevent the "fragmentation" of the business into the multiple entities to avoid the payroll tax; the payroll tax returns (the "payroll tax return") — the employer must: (a) "register" for the payroll tax within 7 days of exceeding the threshold, (b) "lodge the monthly return" (the "monthly payroll tax return") by the 7th day of the following month (the "7th of the month" for the monthly lodgement), OR (c) "lodge the annual return" (the "annual reconciliation") by the 21 July of the following year; the employer can apply for the "annual payroll tax return" (the "annual lodgement") if the employer qualifies for the "low-risk" status (the "employer with the wages below $2 million or the threshold" depending on the state); the penalties for the non-compliance — the penalties for the failure to register, to lodge, or to pay the payroll tax include: (a) the "late payment penalty" at 5% to 25% of the unpaid tax (depending on the duration of the late payment), (b) the "interest" on the unpaid tax (the "market rate" plus the "premium" — typically 8% to 15% per year), (c) the "penalty for the failure to register" at up to 50% of the unpaid tax. All amounts in Australian Dollars (AUD). For related reading, see our Hiring Employees Guide → and Starting a Business Guide →.
State Thresholds & Rates — 2025-26
- NSW — $1.2M / 4.55%: The annual threshold is $1.2 million. The rate is 4.55% on the wages above the threshold. The monthly threshold is $100,000. The regional employer exemption is available for the businesses with the wages below $1.2 million in the regional NSW.
- VIC — $1.3M / 4.85%: The annual threshold is $1.3 million. The rate is 4.85% on the wages above the threshold. The regional rate is 4.25%.
- QLD — $1.3M / 4.75%: The annual threshold is $1.3 million. The rate is 4.75% on the wages above the threshold. The regional rate is 3.75%.
- WA — $1M / 5.5%: The annual threshold is $1 million. The rate is 5.5% on the wages above the threshold. The threshold is NOT indexed annually.
- SA — $1.5M / 4.95%: The annual threshold is $1.5 million. The rate is 4.95% on the wages above the threshold.
- TAS — $1.25M / 4%, ACT — $2M / 6.85%, NT — $1.5M / 5.5%
For the grouping rules and the "group threshold", see our Hiring Employees Guide →.
Grouping Rules
- Common control — corporations: The corporations under the "common control" (the "same directors" or the "same shareholders" holding at least 40% of the shares) are "grouped". The "linked corporations" (the "subsidiaries" of the "parent company") are also grouped. The grouped entities share the single threshold.
- Trusts and individuals: The trustee of the trust and the "beneficiaries" with the "entitlement" to at least 40% of the trust income are grouped. The individual and the "company" controlled by the individual are also grouped. The grouping rules apply across the "interstate" operations — the wages in all the states are aggregated for the threshold.
For the monthly return lodgement and the annual reconciliation, see our Starting a Business Guide →.