How Much Payroll Tax In Australia?
How Much Payroll Tax In Australia?
Are you an Australian employer who is unsure about the amount of payroll tax you must pay? When your total Australian salaries exceed a specific threshold, your state will impose a payroll tax on the wages you pay your employees. The various payroll tax rates and thresholds in several Australian states and territories for the financial year 2023–2024 will be discussed in this blog.
What Is Payroll Tax?
Payroll tax is a state tax, and each state and territory has its own rates and thresholds. This can make it a bit complex for businesses that operate in multiple locations. However, there have been efforts to harmonise payroll tax across Australia for administrative consistency.
It’s important to note that if you are part of a group of employers, the threshold is calculated based on the combined annual Australian taxable wages of the group.
What’s Considered Taxable Wages?
Taxable wages encompass a broad range of payments and benefits, including:
- Wages, salary, commission, bonuses, and allowances
- Superannuation contributions
- Contractor payments
- Directors’ fees
- Payments for accrued annual leave or termination
- Fringe benefits
- Payments to employment agencies
- Certain allowances and reimbursements
What’s Not Considered Taxable Wages?
Certain payments are exempt from payroll tax and are not considered taxable wages. These include:
- Paid maternity, adoption, or primary carer leave
- Paid parental leave
Now, let’s explore the specific payroll tax rates and thresholds for each Australian state and territory in tabular form for the financial year 2023/24:
|State/Territory||Payroll Tax Rate||Threshold (2023/24)||Additional Information|
New South Wales
|Victoria (VIC)||Metropolitan: 4.85%||$700,000||Mental Health Surcharge (Over $10 million): 0.5%|
|Regional: 1.2125%||COVID Debt Surcharge (Over $10 million): 0.5%|
|Queensland (QLD)||Up to $1.3 million: 4.75%||Mental Health Levy (Over $10 million): 0.25%|
|Over $6.5 million: 4.95%||Regional Discount (Until 30 June 2023): 1%|
|South Australia (SA)||Variable: 0% – 4.95%||$1.7 million|
|Western Australia (WA)||5.5%||$1 million|
|Tasmania (TAS)||$1.25 million – $2 million: 4%|
|Over $2 million: 6.1%|
|Northern Territory (NT)||5.5%||$1.5 million|
State Revenue Office & Tax Relief
Each state revenue office may provide additional information and rules, including tax relief measures and exemptions. It’s crucial to refer to your relevant state revenue office’s website for the most up-to-date and detailed information.
Given that payroll tax is a state-level tax, employers must ensure that they review and understand their obligations around registration and payment of payroll tax with the relevant state revenue offices. Employers that operate in multiple states and/or territories must conduct the right due diligence on their total taxable Australian wages to avoid neglecting payroll tax. Failure to register and pay payroll tax can result in financial penalties and interest.
In conclusion, understanding payroll tax rates and thresholds in Australia is crucial for employers to ensure compliance and avoid financial penalties. Stay informed about the regulations in your state or territory to meet your payroll tax obligations effectively. And if you have any issues with payroll taxation, you can consult KPG Taxation. They have expert tax accountants who can help you deal with payroll taxation so that you can have peace of mind!
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