Payroll Tax in Australia – State by State
Payroll tax is a state and territory tax on the wages you pay once your total wages go over a threshold. Each state sets its own threshold and rates – and if you pay wages in more than one state, it gets more complex.
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2026–27 annual thresholds (general)
| State / territory | Annual threshold | Notes |
|---|---|---|
| NSW | $1,200,000 | 5.45% |
| Victoria | $1,000,000 | 4.85% standard rate; threshold phases out for larger employers; surcharges may apply |
| Queensland | $1,300,000 | 4.75% (4.95% above $6.5m Australian wages); regional discount may apply |
| Western Australia | $1,000,000 | Threshold phases out for larger employers |
| South Australia | $1,500,000 | Rate phases in above the threshold |
| Tasmania | $1,250,000 | Tiered rates |
| ACT | $1,750,000 | Reduced from $2m on 1 July 2026; tiered rates by national wages |
| Northern Territory | $2,500,000 | Higher rate for the largest employers |
Thresholds are general annual figures and may be reduced, apportioned or phased out depending on your total Australian wages. Confirm current figures with us.
What counts as wages?
- Salaries, wages, bonuses and commissions
- Superannuation contributions
- Fringe benefits
- Some payments to contractors (contractor provisions)
- Termination payments and some allowances
Grouping rules
Related businesses can be “grouped” – for example, companies with common owners. Grouped businesses share one threshold, so you may be liable even if each business is small on its own.
How UV TAX helps
- Check whether you need to register in each state
- Work out taxable wages, including contractors
- Review grouping
- Prepare monthly and annual returns
⚠️ General information only – not tax or legal advice. Payroll tax rates, thresholds, exemptions and grouping rules differ between states and change regularly. The figures above are general and may not reflect every rate tier or surcharge. This page is a simple overview as at November 2026 and does not consider your personal circumstances. Tax laws, rates and thresholds change regularly. Please get advice for your situation before acting.
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0466 268 405Frequently asked questions
What is payroll tax?
A state or territory tax on wages paid by employers once total wages exceed a threshold.
Do contractors count for payroll tax?
Some payments to contractors can count as wages under contractor provisions.
What if I pay wages in more than one state?
Your threshold is usually apportioned, and you may need to register in each state.
Is payroll tax the same as PAYG withholding?
No. PAYG withholding is tax you withhold from employees’ pay; payroll tax is a separate state tax paid by the employer.
Related
General information current as at November 2026.