Payroll Tax Calculator 2026–27

What is payroll tax?

Payroll tax is a state and territory tax on employers. It is charged on the total wages an employer, or a group of related employers, pays once those wages go over a tax-free threshold. It is not a deduction from employees' pay and it has nothing to do with PAYG withholding, which is federal income tax. Each state and territory has its own Payroll Tax Act, rate and threshold. However, since a 2010 harmonisation protocol, most of the definitions match across states, including lodgment timing, motor vehicle and accommodation allowances, fringe benefits and grouping.

The threshold is always tested on total Australian wages, not just the wages paid in one state. In 2026–27 the highest threshold is Northern Territory's $2,500,000 and the lowest is $1,000,000 (Victoria and Western Australia).

Payroll tax rates and thresholds by state, 2026–27

The table applies each state's own method to a single, ungrouped employer whose wages are all paid in that state for the full year. Headline rates only tell part of the story. Several states phase out the tax-free amount for larger payrolls, and some add levies or higher rates for very large employers. On $5,000,000 of wages, Queensland is the cheapest at $200,857 and Western Australia the most expensive at $253,846.

Payroll tax threshold when you pay wages in more than one state

An employer paying wages in several states claims only part of each state's threshold, in proportion to the share of its Australian wages paid there. Take $3,000,000 of wages, $2,000,000 in New South Wales and $1,000,000 in Victoria. NSW allows $800,000 of its $1,200,000 threshold, so NSW tax is $65,400. Victoria allows $333,333 of its $1,000,000 threshold, so Victorian tax is $32,333. That makes $97,733 in total, even though neither state's wages alone look large. Nexus rules decide which state a mobile employee's wages belong to, so they are not taxed twice.

Grouping: when related businesses share one threshold

Businesses linked by ownership or by how they operate are grouped, and only one member of the group can claim the tax-free threshold. Revenue NSW lists the grouping tests that all states broadly share:

• related bodies corporate under section 50 of the Corporations Act 2001
• common control, where the same person or people hold a controlling interest in each business
• tracing of interests, where an entity holding a majority interest in a corporation is grouped with it
• common employees, where staff work for or in connection with more than one business
• subsuming, where smaller groups merge into one larger group

What counts as wages: contractors and other payments

Taxable wages are wider than salary. In NSW they include fringe benefits, employer super contributions, termination payments, allowances, bonuses and commissions, directors' fees, shares and options, apprentice and trainee wages, and payments to contractors. Revenue NSW says its audits often uncover errors in how the contractor provisions are applied. Under a "relevant contract", the business receiving a contractor's services is treated as the employer, and the labour part of the payments is taxable unless one of seven exemptions applies.

Those exemptions cover services ancillary to supplying goods, services your business does not ordinarily need, services needed for 180 days or less in a financial year, services provided for 90 days or less, contractors who provide the same services to the public, work performed by two or more people, and owner-drivers. Revenue NSW warns that a worker having an ABN or working through a company does not on its own make payments exempt. Materials, tools, equipment and the GST component are not taxable.

Regional discounts, levies and apprentice relief

Two states cut the rate for regional employers. A Victorian employer with $5,000,000 of wages that qualifies as a regional employer pays $60,625 instead of $242,500, and a qualifying Queensland employer pays $158,571 instead of $200,857. Both states require at least 85% of the employer's taxable wages in that state to be paid to regional employees, and Queensland also requires the principal place of employment to be in regional Queensland. Very large payrolls face extra charges: Victoria's mental health and COVID debt surcharges and Queensland's mental health levy apply above $10 million of wages, the ACT's single rate rises in tiers as Australia-wide wages grow, and the Northern Territory charges a higher rate on groups paying $100 million or more.

Apprentices are treated differently too. Western Australia exempts wages paid to apprentices under an approved training contract, Queensland gives a 50% rebate on apprentice and trainee wages, and New South Wales offers a rebate for apprenticeships and traineeships recognised by Training Services NSW. Tick the regional option in the calculator above if it applies to you, and check your state page for apprentice rebates and exemptions.

Registering, lodging and paying

You must register once your total Australian wages go over the monthly threshold in a month. In New South Wales, monthly returns are due 7 days after the end of each month and the annual reconciliation is due on 28 July. Revenue NSW requires monthly payments once annual liability is more than $20,000, and registered employers must lodge an annual return even if it is nil. Victoria also requires monthly returns by the 7th, with its annual reconciliation due on 21 July. In the Northern Territory, returns are due on the 21st of the following month. Check the due dates and rebates for your state on its page below.