Payroll tax is a tax imposed by all of the Australian States and Territories. The tax is imposed on employers whose 'taxable wages' exceed a certain level.
Payroll tax is a tax imposed by all of the Australian States and Territories. The tax is imposed on employers whose 'taxable wages' exceed a certain level.
For payroll tax rates see
below.
Each state has pay-roll tax legislation comprising the Act, Regulations and administrative rules. The main legislation is:
The key issues for the Pay Office relating to pay-roll tax are:
An employer must pay pay-roll tax if its taxable wages for the previous period exceeded the pay-roll threshold. The thresholds and pay-roll tax rates vary. For example, the current lowest pay-roll tax rate is 4.75 for Queensland and the maximum rate is 6.85% for the ACT.
2. What are taxable wages?
All amounts that are wages for pay-roll tax purposes, other than exempt amounts, are taxable wages. Taxable wages include:
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wages, salary, commission, bonuses and allowances paid to employees;
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fringe benefits;
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employer superannuation contributions for an employee;
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eligible termination payments;
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unused leave payments;
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certain trust distributions made in lieu of wages; and
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payments to independent contractors working under ‘service’ contracts.
Exempt wages include wages paid by non-profit schools, by charitable and religious institutions and by employers to apprentices.
Liability to pay-roll tax may, in some cases, extend to:
Back to General issues
3. Current payroll tax rates
Information on payroll tax is kept current
here.
The Payroll Tax Thresholds and rates for Australian states and territories for 2015/16 are as follows:
ACT
Annual wage threshold: $2,000,000
Monthly wage threshold: $166,166
Rate 6.85%
The ACT government has announced it will lift the threshold to $2 million in 2016-17.
Northern Territory
Annual wage threshold: $1,500,000
Monthly wage threshold: $125,000
Rate: 5.5%
NSW
Annual wage threshold: $750,000
Monthly 28 day threshold: $57,534
Monthly 30 day threshold: $61,644
Monthly 31 day threshold: $63,699
Rate: 5.45%
Queensland
Annual wage threshold: $1,100,000
Monthly wage threshold: $91,666
Weekly wage threshold: $21,153
Rate: 4.75%
South Australia
Annual wage threshold: $600,000
Monthly wage threshold: $50,000
Weekly wage threshold: $12,500
Rate: 4.95%
Victoria
Annual wage threshold: $575,000
Monthly wage threshold: $47,916
Rate: 4.85%
The Victorian threshold will be lifted to $650,000 over a four-year period, commencing from 2016-17.
Tasmania
Annual wage threshold: $1.25 million
Monthly wage threshold: No of days in month divided by days in the year x $1.25 million
Rate: 6.1%
Western Australia
Annual wage threshold: $850,000
Monthly wage threshold: $70,833
Rate: 5.5%
The threshold gradually diminishes for payrolls between $850,000 and $7.5 million, with payrolls of $7.5 million taxable on their entire wages.