This page provides a reference summary of payroll tax thresholds and rates for all eight Australian states and territories for FY2025–26. Payroll tax is a state-administered employer tax — rates and thresholds are set by each state government in its annual budget and can change each financial year.
Payroll Tax Thresholds and Rates — All States (FY2025–26)
| State/Territory | Annual threshold | Monthly deduction | Rate above threshold | Revenue authority |
|---|---|---|---|---|
| NSW | $1,200,000 | $100,000/month | 5.45% | Revenue NSW |
| VIC | $700,000 | $58,333/month | 4.85% | State Revenue Office VIC |
| QLD | $1,300,000 | $108,333/month | 4.75% | Queensland Revenue Office |
| WA | $1,000,000 | $83,333/month | 5.5% | WA Office of State Revenue |
| SA | $1,500,000 | $125,000/month | 4.95% | RevenueSA |
| TAS | $1,250,000 | $104,167/month | 4.0% | State Revenue Office TAS |
| ACT | $2,000,000 | $166,667/month | 6.85% | ACT Revenue Office |
| NT | $1,500,000 | $125,000/month | 5.5% | NT Revenue Office |
Monthly deduction = Annual threshold ÷ 12 (used in monthly lodgements). Rates and thresholds are subject to change with each state budget.
Key Comparison Points
Lowest threshold — VIC ($700,000)
Victoria has the lowest payroll tax threshold in Australia. A business paying $700,001 in annual wages in VIC becomes liable for payroll tax on the amount above $700,000. This affects a significant proportion of small and medium businesses in Victoria.
Highest threshold — ACT ($2,000,000)
The ACT has the highest threshold at $2 million — but also the highest rate (6.85%). In practice, the high threshold means fewer ACT businesses pay payroll tax, but those that do pay at a higher rate.
Lowest rate — TAS (4.0%)
Tasmania has the lowest payroll tax rate of all jurisdictions. Combined with a $1.25M threshold, Tasmania is generally the lowest payroll tax burden environment among the states (though business decisions involve many more factors than payroll tax alone).
Monthly Payroll Tax Calculation
Payroll tax is lodged monthly. The monthly taxable wages are:
$$\text{Monthly taxable wages} = \text{Monthly wages} - \text{Monthly deduction}$$
$$\text{Monthly payroll tax} = \text{Monthly taxable wages} \times \text{Tax rate}$$
Example — QLD employer paying $150,000 wages per month:
$$($150,000 - $108,333) \times 4.75% = $41,667 \times 4.75% = $1,979$$
Annual Reconciliation
At the end of each financial year, employers complete an annual reconciliation to confirm actual wages paid and true liability. Monthly estimates are trued up at this point. Most states require the annual reconciliation by 21 July each year.
Wages Definition — What Is Included
The definition of “wages” for payroll tax purposes is broad and includes:
| Included | Notes |
|---|---|
| Salaries and wages | All regular employee wages |
| Bonuses and commissions | Included when paid |
| Allowances | Car, travel, meal allowances |
| Employer super contributions | Included in most states |
| Fringe benefits | Taxable value |
| Contractor payments | Under contractor provisions |
| Director fees | Yes |
State Revenue Authority Contacts
| State | Website | Phone |
|---|---|---|
| NSW | revenue.nsw.gov.au | 1300 139 815 |
| VIC | sro.vic.gov.au | 13 21 61 |
| QLD | qro.qld.gov.au | 1300 300 734 |
| WA | finance.wa.gov.au/osr | 9262 1100 |
| SA | revenuesa.sa.gov.au | 1300 366 150 |
| TAS | sro.tas.gov.au | 1300 135 513 |
| ACT | revenue.act.gov.au | (02) 6207 0028 |
| NT | nt.gov.au/tax | 1300 305 353 |
Related Articles
- Payroll Tax Australia — Complete Guide
- What Is Payroll Tax and Who Pays It?
- Payroll Tax Grouping Provisions
- State and Territory Taxes — Overview
- State and Territory Tax hub
- Taxes hub
Frequently Asked Questions
Has the VIC payroll tax threshold increased recently? Victoria has historically had one of the lowest thresholds. The $700,000 threshold has been a consistent point of criticism from business groups. Check the State Revenue Office VIC website for any budget updates affecting the current financial year.
Are payroll tax thresholds indexed to inflation? Not automatically. Thresholds are set by state governments and change only when legislated via the annual budget. Some states have been increasing thresholds gradually; others have not moved them for years.
If I pay wages in multiple states, do I get a full threshold in each one? No. The threshold is shared and apportioned across states in proportion to wages paid in each state. See Payroll Tax Australia — Complete Guide for the apportionment calculation.
Thresholds and rates change annually. This table reflects FY2025–26 figures and should be verified against the current state budget announcements before use. For advice tailored to your business, speak with a registered tax agent. Find one through the Tax Practitioners Board register.