Payroll Tax is a state tax on the wages paid by employers. It’s calculated on the amount of wages you pay per month and collected in each state or territory that your employees are located in.
However, not all businesses will have a tax obligation. You are only liable for payroll tax if your total Australian wages exceed the tax-free threshold that applies in your state or territory — tax-free thresholds vary between states and territories.
Example
In financial year 2016-17, QLD and NSW have a 31-day threshold of $91,666 and $63,699 respectively.
If you employ staff in QLD and NSW and your total Australia-wide wage bill for those 31 days is $95,000, you will need to register for Payroll Tax in both states. If your bill is $75,000, you would only need to register in NSW.
If your total Australian wage bill is under the maximum threshold for your state or territory, you’re not liable to pay. Find out the monthly thresholds for each jurisdiction by visiting the Revenue Office website in your state or territory.
What to do…
You need to register for payroll tax in your state or territory. Check with the Revenue Office in your state or territory for the payroll tax rate and threshold that applies to you.
There are also various employer-based exemptions for payroll tax. Check with your relevant Revenue Office/s to find out if your business qualifies for an exemption.
You’ll also need to contact the relevant state or territory office when closing your business.
Revenue Office in each state or territory: