Payroll tax is a state- and territory-based tax in Australia imposed on employers whose total wages exceed a specific threshold within a financial year. Unlike income tax, which is collected by the federal government, payroll tax is administered separately by each state or territory, and rates and thresholds differ depending on your business location.
The tax is calculated on total wages paid, which includes salaries, bonuses, allowances, fringe benefits, superannuation contributions, and other employee-related payments.
🔗 ATO – Payroll Tax Overview
🔗 Business.gov.au – Payroll Tax by State
Any business in Australia that exceeds the state or territory’s threshold for taxable wages may be liable for payroll tax. This applies to:
Each state or territory sets its own:
Example Thresholds (FY 2024–25):
These figures are indicative. Always refer to your local revenue office for up-to-date figures.
Generally, payroll tax is calculated on the total taxable wages, which may include:
🔗 See: Contractors and Payroll Tax
Some payments or businesses may be exempt or eligible for concessions, such as:
Each revenue office provides specific rulings on what constitutes exempt wages.
Payroll tax is usually self-assessed and lodged either:
Lodgement and payment are done via your state’s revenue office portal, such as:
Microkeeper’s payroll software streamlines wage tracking and integrates with your payroll processes, helping you:
While Microkeeper does not directly calculate payroll tax liabilities, it provides all the wage data needed to assist with accurate reporting and payment.
Explore Microkeeper’s Payroll Software
No. Payroll tax is administered at the state or territory level. Rules and thresholds vary.
No, but you should monitor wages regularly, especially if your team is growing or you use contractors.
In some cases, yes. If a contractor provides services similar to an employee and works regularly for your business, their payments may be included.
Often, yes, but only if registered and approved by your local revenue office. Always check your eligibility.
Payroll tax is an important consideration for growing businesses across Australia. If your total wages approach or exceed the relevant state or territory threshold, you may be required to register and pay this tax. Staying informed, maintaining accurate payroll records, and leveraging trusted payroll software like Microkeeper can help you stay compliant and avoid penalties.
Disclaimer: This article is intended for general information only and does not constitute financial or legal advice. Please consult your accountant or state revenue authority for tailored advice.
