Payroll tax applies throughout Australia. However, it is a State based tax. It is not collected by the Federal Government but by each Office of State Revenue in every State^.
Every State has its own payroll tax regime. From the 30 June 2016 the threshold amounts and rates of payroll tax for each jurisdiction apply as follows:
| Jurisdiction | Rate of Tax | Threshold Amount |
| ACT | 6.85% | $2,000,000 |
| NSW | 5.45% | $750,000 |
| NT | 5.50% | $1,500,000* |
| Qld | 4.75% | $1,100,000* |
| SA | 4.95% | $600,000 |
| Tas | 6.10% | $1,250,000 |
| Vic | 4.85% | $575,000 |
| WA | 5.50% | $850,000** |
*Threshold reduces by $1 for every $4 that the threshold is exceeded. In Qld you do not get the benefit of the threshold after $5.5m and NT after $7.5m.
**Diminishing threshold. Over $7.5m no threshold applies.
If you have a small business in Queensland and your payroll does not exceed $1.1m per annum then you won’t pay payroll tax as long as your business is not grouped with any other business. And that includes businesses not just in Queensland but anywhere in Australia.
Payroll tax is calculated on the total amount of wages payable in Australia but each State has its own individual payroll tax rates and threshold amounts that apply to wages paid in that State.
And whilst Queensland’s rate of payroll tax compares favourably with other States once your payroll exceeds $5.5m per annum you do not obtain the benefit of the Queensland threshold for payroll tax.
Some States have very low thresholds such as Victoria where if you have a small business where your payroll is more than $575,000 per year then you must start paying payroll tax.
Unfortunately, it is unlikely State governments will ever do away with payroll tax. In Queensland and Victoria, for example, payroll tax is each State’s largest source of taxation revenue: https://www.linkedin.com/pulse/payroll-tax-biggest-earner-queensland-victoria-peter-tobin
So unfortunately payroll tax is here to stay. Fortunately, however, there is legal assistance available for any business wanting advice about payroll tax in their particular State.
At Tobin Partners we have many years’ experience in advising businesses on the various payroll tax legislation and regimes throughout Australia.
Our principal, Peter Tobin has not only experience in taxation law but he is also an experienced businessman. If you want a lawyer who can understand your problems and try and work out some solutions give him a call on 07 3260 5189.
^In this article, “State” includes the Territories of Australia
