Payroll tax is a state or territory tax. It's calculated on the total wages you pay each month. The state or territory that your employees are located in collects the tax.
The payroll tax rates and thresholds vary between states and territories. The payroll tax is mandatory for each state only after a certain wage threshold is reached.
Below are the threshold rate for the payroll income tax for each state in Australia.
- Australian Capital Territory
ACT - From 1 July 2016
Threshold:
$2,000,000 (annually)
$166,666.66 (monthly)
Rate: 6.85%
2. New South Wales
New South Wales From 1 July 2016
Threshold:
$92,055 (28 day month)
$98,630 (30 day month)
$101,918 (31 day month)
$1,200,000 (2020 FY onwards) (Annual Cap)
Rate:
- 4.85% (1 July 2020 to 30 June 2022)
3. Northern Territory
Threshold:
$1,500,000 (annually)
$125,000 (monthly)
Rate: 5.50%
4. Queensland
Queensland - From 1 July 2019
Threshold:
$1,300,000 (annually)
$108,333 (monthly)
$25,000 (weekly)
Rate: 4.75 %
5. Tasmania
Annual Threshold
| Wages ($) | Rate (%) |
| 0 to 1 250 000 | 0 |
| 1 250 001 to 2 000 000 | 4 |
| 2 000 001 and above | 6.1 |
6. Victoria
Threshold:
$650,000 (annually)
$54,166 (monthly)
Rate: 2.425% for employers
7. Western Australia :
| Annual Australian taxable wages | Tax rate | Calculation of tax payable |
| More than $1 million but less than $7.5 million | 5.5% | WA taxable wages - deductable amount x tax rate |
| $7.5 million or more but not exceeding $100 million | 5.5% | WA taxable wages x tax rate |
| More than $100 million but not exceeding $1.5 billion* | 5.5% for wages up to $100 million + 6% for wages from $100 million to $1.5 billion | WA taxable wages x tax rate |
| More than $1.5 billion* | 5.5% for wages up to $100 million + 6% for wages from $100 million to $1.5 billion + 6.5% for wages above $1.5 billion | WA taxable wages x tax rate |
8. South Australia
Payroll Tax Rates
From 1 January 2019, businesses with annual taxable wages of up to $1.5 million are no longer liable for payroll tax and those with taxable wages between $1.5 million and $1.7 million benefit from a reduced payroll tax rate.
| Effective Date | Annual Australian Taxable Payroll | |||
| Does not exceed $600 000 | Exceeds $600 000 but not $1 million | Exceeds $1 million but not $1.5 million | Exceeds $1.5 million but not $1.7 million | Exceeds $1.7 million |
| from 1 January 2019 | nil | variable from 0% to 4.95% | 4.95% |
- For South Australia there are no formulas for calculating the variable tax rate for the annual wages of 1 million to 1.5 million.
- A rate table will cover that variable tax rate which is attached in this ticket.
Reference: https://www.payrolltax.gov.au/harmonisation/payroll-tax-rates-and-thresholds
Deskera Books has implemented these tax thresholds state wise in backend which will auto calculate the payroll Taxes.