Payroll Tax by State — Thresholds, Rates & Registration
Payroll tax is a state and territory tax on wages paid by employers above a threshold. Each jurisdiction sets its own rate and threshold, ranging from 4.75% to 6.85%. Businesses operating across state lines must register in each state where they have employees and apportion their threshold accordingly.
Overview
Payroll tax is a state and territory tax on wages paid by employers above a threshold. Each jurisdiction sets its own rate and threshold, ranging from 4.75% to 6.85%. Businesses operating across state lines must register in each state where they have employees and apportion their threshold accordingly.
Key Facts
- NSW: 5.45% on wages over $1.2M annually (2025-26)
- VIC: 4.85% on wages over $900K, plus 0.5% mental health surcharge above $10M
- QLD: 4.75% on wages over $1.3M (rising to 25% rate for wages above $100M)
- WA: 5.5% on wages over $1M annually
- Multi-state employers must register in each state and apportion the tax-free threshold by wages in each jurisdiction
What You Need to Know
This guide covers the essential compliance requirements that Australian employers need to understand. Non-compliance can result in significant penalties, ATO audits, and reputational damage.
We recommend using purpose-built software that automates compliance reporting. The right software will handle rate changes, deadline reminders, and lodgement with the relevant authorities.
Official Resources
For the latest official requirements, refer to these government resources:
- Revenue NSW — Payroll Tax — NSW payroll tax rates, thresholds, and registration requirements
Recommended Software
The following software products handle payroll compliance for Australian businesses: