How to Calculate Payroll Tax in Australia (2026-27 Rates for All 8 States and Territories)

Payroll tax is not PAYG withholding

Payroll tax is a state and territory tax on the wages an employer pays, calculated on the employer's total Australian wage bill once that bill passes a threshold. PAYG withholding is a federal obligation to withhold tax out of each employee's pay and send it to the ATO. Different governments, different bases, different returns.

The ACT Revenue Office puts the first half of that in one line: "Payroll tax is a State and Territory tax on wages that employers pay employees. The tax is calculated based on the amount of wages you pay employees Australia-wide per month." The State Revenue Office of Victoria says the same thing about Victorian employers whose total Australian wage bill exceeds the tax-free threshold, and Revenue NSW assesses on gross Australian wages paid or payable.

Here is the sharpest contrast between the two, and the one worth carrying away. PAYG withholding applies from the first dollar you pay the first employee: the ATO requires you to register before you are first required to make a payment subject to withholding, even if you withhold nothing from that payment. Payroll tax applies only once your total Australian wage bill crosses a threshold that sits somewhere between $1 million and $2.5 million depending on where you employ.

The reporting side splits the same way. PAYG withholding is reported to the ATO through activity statements and Single Touch Payroll, and the mechanics of the withheld amount itself are covered in the PAYG withholding guide. Payroll tax is reported to eight separate revenue offices through eight separate systems: Payroll Tax Online in NSW, PTX Express in Victoria, QRO Online in Queensland, Revenue Online in WA, RevenueSA Online, Tasmanian Revenue Online, the Self Service Portal in the ACT and INTRA in the NT.

How payroll tax is calculated

Take your gross taxable Australian wages for the period, subtract the threshold or deduction your jurisdiction allows, then multiply the remainder by that jurisdiction's rate. RevenueSA writes the same formula out longhand: gross taxable wages, less deduction, equals net taxable wages, multiplied by the tax rate, equals payroll tax payable. Every jurisdiction works this way.

Two things complicate it, and both catch employers out. First, the threshold is almost never the full threshold. Revenue NSW publishes the two mechanisms plainly: apportion by days employed (threshold multiplied by days employed, divided by days in the financial year), and apportion by interstate share (threshold multiplied by local wages, divided by total Australian wages). Both can apply at once. Every other jurisdiction states the same principle.

Second, in several jurisdictions the rate is set by your total Australian wages while the tax is charged on your local wages. Queensland sets 4.75% or 4.95% off Australian taxable wages, South Australia sets the rate off total Australian wages and applies the deduction against South Australian wages, and the ACT band you land in is decided by wages Australia-wide. A business with a small local presence and a large interstate one can pay the top rate on a modest local wage bill.

One more structural point before the numbers. Payroll tax is self-assessed in every jurisdiction. WA states it directly: you are responsible for calculating your liability and paying the tax in the form of a return. No revenue office issues you an assessment first. That is also why the word "threshold" has to be read carefully, because it means three different things across the eight:

• A straight tax-free threshold you deduct in full: NSW, Queensland, Tasmania, the ACT and the NT.
• A maximum deduction that tapers away as wages rise: Victoria above $3 million, WA above $1 million.
• A registration threshold that is a different number from the deduction: South Australia, where the threshold is $1.5 million and the maximum deduction is $600,000.

A note on the plural phrasing. Searches for how to calculate payroll taxes mostly surface American material about FICA and FUTA, which are federal United States employer taxes with no Australian equivalent. In Australia there is one payroll tax per jurisdiction, charged by that jurisdiction, and the method above is the whole of it.

Payroll tax rates and thresholds for 2026-27, by state and territory

Thresholds run from $1 million in Victoria and WA to $2.5 million in the Northern Territory. Rates run from 4.75% in Queensland to 8.75% at the top ACT band. Four jurisdictions charge a single flat rate above the threshold, four charge tiered or variable rates, and three add a levy or surcharge once a national payroll gets large.

Every row was fetched from the named revenue office on 30 July 2026. Three of the eight, Queensland, WA and South Australia, do not label their current rate tables with a financial year, which is what the last column records. Their figures are current, but the year label is ours rather than theirs.

How to calculate payroll tax in NSW

5.45% on NSW wages above a $1,200,000 annual threshold for 2026-27, with the threshold reduced in proportion to your NSW share of total Australian wages. Revenue NSW has published the same rate and threshold since 1 July 2022, and its 2026-27 table row reads "1 July 2026 – 30 June 2027 | $1,200,000 | 5.45%".

The arithmetic on wages paid wholly in NSW is one line. Pay $1,500,000 in NSW wages for the year, deduct the $1,200,000 threshold, and 5.45% is charged on the remaining $300,000, giving $16,350.

If you also employ interstate, the threshold shrinks first. Revenue NSW apportions it as the NSW threshold multiplied by your NSW wages, divided by your total Australian wages. If you employed for only part of the year, it apportions again by days employed over days in the financial year. Both adjustments can apply to the same employer.

Monthly returns use one of the published monthly thresholds, which vary with the length of the month: $92,055 for a 28-day month, $98,630 for 30 days and $101,918 for 31 days. The 2026-27 monthly due dates published by Revenue NSW are 7 August, 7 September, 7 October, 9 November and 7 December 2026, then 14 January, 8 February, 8 March, 7 April, 7 May and 7 June 2027, with the annual return on 28 July 2027. There is no separate June monthly return; June wages go into the annual return.

How to calculate payroll tax in Victoria

4.85% on Victorian taxable wages above a $1,000,000 annual deduction, or 1.2125% for regional Victorian employers. The catch is the deduction rather than the rate: from 1 July 2025 the deduction phases out at 50 cents in the dollar once total Australian wages pass $3 million, and disappears entirely above $5 million.

The SRO publishes the monthly deduction at $83,333. Its current rates table is headed "Payroll tax rates from 1 July 2025 onward" and the page was updated 10 July 2026, so the 2026-27 position is the same table. The SRO's own list of changes taking effect on 1 July 2026 carries one payroll tax item, the accommodation allowance exempt amount, and no rate or threshold change.

Above $10 million of Australian wages two surcharges stack on top of the general rate: the mental health and wellbeing surcharge, in place since 1 January 2022, and the COVID-19 debt temporary payroll tax surcharge, which runs until 30 June 2033. The SRO states the combined effect as 1% for businesses with a national payroll above $10 million and 2% above $100 million, applied only to the Victorian share of wages over those thresholds. The first monthly threshold for the surcharges is $833,333.

How to calculate payroll tax in Queensland

4.75% if your Australian taxable wages are $6.5 million or less, 4.95% if they are more, charged on Queensland taxable wages above a $1.3 million annual threshold. Regional employers may be entitled to a 1% discount on the rate until 30 June 2030. Above $10 million of Australian wages the mental health levy adds 0.25% on top.

The mental health levy is applied proportionately to Queensland taxable wages, in two steps. Nothing up to $10 million of Australian taxable wages. 0.25% above the $10 million primary threshold. Then 0.25% plus a further 0.5% above the $100 million additional threshold. The Queensland Revenue Office publishes worked examples of the levy for the 2026-27 financial year.

Queensland runs a rebate for apprentice and trainee wages rather than an exemption, and the 2026-27 Queensland Budget of 23 June 2026 extended it to 30 June 2027. It was the only payroll tax measure in that Budget, and QRO notes that details will follow once the legislation passes and receives Royal Assent.

Periodic returns are monthly by default, with a half-yearly option, and are due 7 days after the end of the period. There is no June periodic return, and a final return is due within 21 days of a change of status. Registration is worth reading twice: QRO states that if your annual Australian taxable wages are $1.3 million or less you may still need to register, even though you may not have a liability.

One honesty note on Queensland. The QRO rates page names no financial year, saying only "the current threshold". Its metadata shows a 3 July 2026 modification while the visible footer reads 17 July 2024. The figures above are what QRO published at 30 July 2026 and they line up with its own 2026-27 mental health levy examples, but QRO does not itself label them 2026-27.

How to calculate payroll tax in WA

5.5% on WA taxable wages, less a deductable amount that starts at $1,000,000 and shrinks as wages rise, reaching nil at $7,500,000. RevenueWA calls this the diminishing threshold and publishes the taper as 2/13: the deductable amount falls by $2 for every $13 of wages above $1 million.

The published formula is deductable amount = annual threshold minus [(wages minus annual threshold) multiplied by the tapering value], where the tapering value is $1,000,000 divided by ($7,500,000 minus $1,000,000), simplified to 2/13. RevenueWA's own worked example: annual wages of $1,200,000 give a deductable amount of $969,231. Above $7.5 million the whole of your WA taxable wages is taxed at 5.5% with no deduction at all.

There is no large-payroll surcharge in WA's current table. The 6% and 6.5% tiers that circulate in older summaries appear only under "Previous rates and thresholds", for 1 July 2020 to 30 June 2023.

WA also publishes the clearest ladder of return frequencies in the country: monthly where your estimated annual liability is $150,000 or more, quarterly where it is under $150,000, and annually where it is under $20,000.

Same honesty note as Queensland. WA's current rates table is headed "From 1 July 2023", the page was updated 2 June 2026, and its worked example refers to the 2025-26 assessment year. These are the current published figures, but WA does not label them for 2026-27.

Payroll tax in SA, Tasmania, the ACT and the NT

Four jurisdictions, four different shapes. South Australia separates the threshold from the deduction, Tasmania runs two bands, the ACT runs five, and the NT runs one rate with a second rate for very large national payrolls. The comparison table above carries the full figures; these are the details that decide whether you have read your own jurisdiction correctly.

South Australia

Nil up to $1.5 million of Australian wages. A variable rate between 0% and 4.95% where Australian wages exceed $1.5 million but not $1.7 million. 4.95% above $1.7 million. The registration threshold is $1,500,000 a year ($125,000 a month, $28,846 a week), and the maximum deduction is a different number again: $600,000 a year, $50,000 a month. That split is unique to SA and is the single thing readers most often get wrong.

RevenueSA does not publish the interpolation formula for the variable band on its rates or calculation pages, and neither will we. It states that RevenueSA Online determines the estimated payroll tax rate, so use RevenueSA's own rate calculator if your Australian wages land in the $1.5m to $1.7m band.

Tasmania

0% on wages to $1,250,000, 4% from $1,250,001 to $2,000,000, and 6.1% from $2,000,001, under a heading the State Revenue Office labels "2026-27 financial year". The liability test is total Australian wages above $1.25 million a year, or $24,038 a week during a month, measured on group wages if you are grouped. An employer that does not wish to claim a threshold amount pays 6.1% on all Tasmanian taxable wages for the month.

Australian Capital Territory

Both the threshold and the rate structure changed on 1 July 2026, so any figure you are carrying from last year is wrong. The annual threshold is now $1,750,000 ($145,833.33 a month), down from $2,000,000 ($166,666.66 a month). The flat 6.85% rate has been replaced by five bands: 6.75% above $1.75m to $20m, 6.85% above $20m to $50m, 7.35% above $50m to $100m, 7.85% above $100m to $150m, and 8.75% above $150m. Eligible universities with an ACT presence are capped at 6.85%. The change was made by Taxation Administration (Amounts and Rates - Payroll Tax) Determination 2026, DI2026-151.

Northern Territory

$2,500,000 annual threshold ($208,333 a month) and a 5.5% rate, with a second rate of 6.5% from 1 July 2026 for employers and members of payroll tax groups with Australia-wide wages of $100 million or more. NT Treasury is explicit that the amendments leave the $2.5 million tax-free threshold, the deduction settings and the general 5.5% rate unchanged for everyone else. The NT is also the one jurisdiction where the monthly payment date is the 21st rather than the 7th.

Grouping: why two small businesses can owe payroll tax that neither owes alone

Related businesses are grouped automatically and share one threshold between them. Two companies under common control, each paying $800,000 in NSW wages, are a single $1.6 million group measured against a single $1,200,000 threshold, so $400,000 becomes taxable even though neither company alone would have registered. Nobody applies to be grouped. It simply is the case.

Revenue NSW lists six ways a group forms, and grouping is one of the harmonised areas across all eight jurisdictions:

• Related corporations within the meaning of section 50 of the Corporations Act 2001
• Common employees, where an employee of one business performs duties for another
• Common control, where the same person or people control more than one business
• Tracing of interests, where an entity holds a controlling interest in another
• Phoenix operators
• Subsuming, where smaller groups are absorbed into one larger group

Only one member of a group claims the threshold, either as the Designated Group Employer or as the Group Single Lodger. Every other member is a non-threshold claiming member and pays the full rate on all of its taxable wages with no threshold at all. Which route you lodge under does not change the total group liability, only how it is split between members: Revenue NSW publishes a worked example where both routes total $13,080 on the same wages.

Two more points make grouping the highest-stakes part of payroll tax. Revenue NSW states that grouping can occur regardless of which state or industry the members employ in, so a business employing modestly in one state can be pulled over the line by a related entity employing in another. And every member of the group is liable for any unpaid payroll tax of any other group member.

A business can apply to be excluded from a group in some circumstances, with one hard limit: businesses grouped as related corporations under the Corporations Act cannot apply for exclusion. If you are not sure whether you are grouped, the ACT Revenue Office publishes a grouping eligibility check precisely because the tests are not obvious from the outside.

What counts as taxable wages

More than salary. Superannuation contributions, fringe benefits, bonuses, commissions, most allowances, directors' fees, termination payments, shares and options, and payments to some contractors all count as wages for payroll tax. Superannuation is liable in full. Fringe benefits are liable at their FBT value.

The two allowance figures are worth writing down because they are harmonised and both Victoria and RevenueSA publish them identically for 2026-27: 88 cents per kilometre for a motor vehicle allowance and $328.85 per night for an accommodation allowance. Victoria notes that the motor vehicle figure deliberately lags the ATO rate by a year, so payroll tax uses 88 cents while the ATO 2026-27 rate is 91 cents. Anything paid above those amounts is taxable wages.

Superannuation is the item that quietly moves employers over a threshold, because the figure being tested is the wage bill plus every contribution on top of it. If you are checking what those contributions come to across a year, the super guarantee calculator works out the employer side at the current rate. Fringe benefits are liable at their FBT value and are grossed up; the current gross-up rates sit on Revenue NSW's fringe benefits page rather than here.

Payments to contractors, and the seven exemptions

Payments to contractors are liable for payroll tax by default, not exempt by default. Revenue NSW puts it in one line: payments made by an employer to contractors are liable for payroll tax unless an exemption applies. Under a relevant contract the contractor is deemed to be the employee and the business receiving the services is deemed to be the employer.

There are three ways of engaging workers for payroll tax purposes, and which one applies decides everything after it: as employees, under employment agency contracts, or under relevant contracts. A relevant contract is a contract, agreement, arrangement or undertaking by which a contractor provides an employer with the services of a worker.

Revenue NSW names seven contractor exemptions:

• Services ancillary to the supply of goods
• Services not ordinarily required by your business
• Services required for 180 days or less in a financial year
• Services provided for 90 days or less in a financial year
• Services provided by a contractor to the public during the financial year
• Services performed by two or more people
• Services provided by an owner driver

If any one of the seven applies, all payments you make to that contractor are exempt from payroll tax. One exemption is enough, but it is assessed contractor by contractor, not across your whole contractor spend.

Where no exemption applies, only the labour component is taxable. Materials, tools, equipment and vehicles are not liable. If the invoice separates labour and non-labour and the split reflects reasonable market rates, you deduct the stated non-labour amount; if it does not, you deduct a prescribed proportion by trade under Revenue Ruling PTA 018. What you cannot deduct is general business overhead that is not specific to the contract, such as maintaining an office, general accounting expenses or insurance.

One more that costs money without warning. Where a contractor fails to pay payroll tax on work done under your contract, the NSW Chief Commissioner can recover it from the principal, if the tax has not been paid within 60 days of the end of the financial year and the principal did not obtain a signed Subcontractor's Statement. Getting the statement protects you from the contractor's liability, not from your own on the payments you made.

Where you engage people on day rates or a contract rate rather than a wage, the payroll tax question comes before the pay question: work out whether the arrangement is a relevant contract first, then work out what the engagement actually costs. The worker side of the same arrangement is covered in the ABN tax rate guide and the sole trader tax calculator.

Medical practices engaging general practitioners as contractors are the most active dispute area in the country: the ACT publishes a separate page and Revenue Ruling PTA041 for designated medical practices, and RevenueSA publishes dedicated guidance for the medical industry. Revenue NSW also publishes industry-specific contractor guidance for building and construction, cleaning, direct selling, meat processing, real estate and security.

Common exemptions, and why they differ by state

Every jurisdiction exempts some wages and the lists do not match. Parental leave, genuine redundancy, workers compensation and Defence Force leave are exempt in most. Apprentices and trainees are an exemption in some jurisdictions and a rebate in others. Charities are assessed at the organisation level, not the wage level.

Apprentices are the cleanest illustration of the variation. Victoria exempts wages for a re-employed apprentice or trainee who continues the same approved training with a new employer, and does not exempt them if the same employer rehires them or if both employers are in the same group. Queensland runs a rebate, now extended to 30 June 2027. NSW runs a rebate for apprentices and trainees recognised by Training NSW. The ACT exempts new starters receiving eligible training. Four jurisdictions, four different answers to the same question.

Limits matter as much as the categories. Victoria's exemption for employer-paid primary or secondary caregiver leave runs to a maximum of 14 weeks, or an equivalent period at a reduced rate of pay such as 28 weeks at half pay, and it does not cover annual, sick or recreational leave taken while absent due to pregnancy or caring for a child. Victoria also exempts WorkCover payments under an approved claim, including the first 10 days paid by the employer, but make-up pay topping a worker up to their usual wage is not exempt.

Commonwealth Paid Parental Leave sits outside the system entirely. In the SRO's framing, those payments are not wages for payroll tax purposes at all, because they are Commonwealth Government payments rather than payments by an employer to an employee.

Charities and non-profits are handled as an organisation-level exemption. Victoria publishes a list of organisations exempt from payroll tax, and Queensland handles it through charitable institution registration. Being a registered charity for ATO purposes does not automatically make an organisation exempt for payroll tax; the revenue office assesses it separately.

Because the lists genuinely differ, check the exemption you are relying on against your own revenue office before you leave wages out of a return. The Sources block below links all eight.

When payroll tax returns are due

Payroll tax is self-assessed and lodged monthly by default in every jurisdiction, due on the 7th of the following month, except in the Northern Territory where payment falls on the 21st. The annual reconciliation is due 21 July in Victoria, Queensland, WA, Tasmania and the NT, and 28 July in NSW, South Australia and the ACT.

June is usually not lodged as a separate monthly return. NSW folds June into the annual return due 28 July, Queensland does not require a June periodic return, Tasmania's Annual Adjustment Return replaces the June monthly return, and the ACT has no separate June return form. WA runs its annual reconciliation with the June return.

Less frequent cycles exist for smaller liabilities. WA publishes the clearest ladder: monthly at $150,000 or more of estimated annual liability, quarterly under $150,000, annually under $20,000. Queensland offers half-yearly periodic returns as an alternative to monthly, and Tasmania and the ACT allow an annual frequency.

Where a due date lands on a weekend or a public holiday it moves to the next business day, and the published 2026-27 tables already apply that: the October 2026 monthly return falls due 9 November 2026 in NSW, Queensland and South Australia, and the December 2026 return falls due 14 January 2027 in NSW, Queensland, South Australia and the ACT.

Registration is a separate obligation from liability, and this is where employers get caught doing nothing wrong. Revenue NSW requires registration once total Australian wages exceed the monthly threshold in any single month, and every registered business must lodge an annual return even if it is a nil return. The ACT gives you seven days: by law you must apply to register within seven days after the end of the month you go over the threshold amount. The federal equivalent obligation, registering for withholding before your first payment to an employee, is covered in registering for PAYG withholding, and the federal date ladder sits in when PAYG is due.

Getting it wrong carries a cost. RevenueSA applies penalty tax at 25% plus market rate interest and an 8% premium component on a default assessment. Revenue NSW applies interest and penalty tax to underpayments, with a reduced penalty where you make a voluntary disclosure.

What changed on 1 July 2026

Three of the eight jurisdictions moved, and two of those changes are structural rather than a rate tweak. Content written from 2025-26 sources is wrong on both of them, which is worth knowing if you are checking these figures against an accounting firm blog post or a summary page.

• ACT. Annual threshold cut from $2,000,000 to $1,750,000 (monthly $166,666.66 to $145,833.33), and the flat 6.85% rate replaced by five bands running 6.75% to 8.75%. Made by Determination DI2026-151.
• NT. A new 6.5% rate for employers and members of payroll tax groups with Australia-wide wages of $100 million or more. The $2.5 million threshold, the deduction settings and the general 5.5% rate are unchanged for everyone else.
• Queensland. The apprentice and trainee rebate extended to 30 June 2027 in the Budget of 23 June 2026, subject to the legislation passing.

The confirmed negatives are just as useful. NSW is unchanged at $1,200,000 and 5.45%, the same as every year since 1 July 2022. Victoria published one payroll tax change for 1 July 2026 and it was the accommodation allowance rate, from $323 to $328.85 per night. Tasmania's bands are unchanged from 1 July 2018. For WA and South Australia the position is narrower: neither revenue office showed a rate or threshold change on its current rates page as at 30 July 2026, which is a negative finding from those pages rather than a reading of either Budget.

Frequently asked questions

Sources

Every rate, threshold and due date on this page was fetched from the revenue office that publishes it on 30 July 2026. Nothing is taken from an aggregator. payrolltax.gov.au, the joint site of the eight offices, is cited below for the harmonisation protocol only: its rates table was last updated 9 June 2026 and is stale for the ACT and NT 2026-27 positions.

Joint, for the harmonisation protocol only, not for any rate or threshold

• Payroll Tax Australia: Resources (the eight harmonised areas, last updated 9 June 2026)

Related resources

Narelle Hartigan, CPA Verified Expert

Tax Accountant & PAYG Specialist

Narelle Hartigan is a CPA-qualified tax accountant with over a decade of experience in Australian personal taxation and payroll. She founded PAYG Calculator Australia to make tax withholding easy for every Australian worker to understand.

CPABCom (Accounting)

Published: 30 July 2026 · Updated: 30 July 2026