Do you need to pay payroll tax?

If you are an employer you may have a payroll tax obligation.

Payroll tax is a state and territory tax on the wages you pay as an employer. It’s calculated on the amount of wages you pay each month and payable in the state or territory of Australia where the services were performed.

Wages liable for payroll tax include:

  • Employee wages
  • Contractor payments
  • Directors’ remuneration
  • Superannuation
  • Allowances
  • Fringe benefits
  • Bonuses and commissions
  • Termination payments

Not all businesses will have a payroll tax obligation. You only have to pay it if your taxable wages (or your group wages) exceed the threshold in your state or territory.

Each state or territory has a different tax threshold as well as registration process. It’s important to know what the threshold is in your state or territory, and if your taxable wages are approaching or have surpassed that threshold because you may have to register for payroll tax.

Payroll tax is generally lodged and paid to state and territory Revenue Offices monthly.

There are various employer-based exemptions for payroll tax. Check with your relevant Revenue Office to find out if your business qualifies for an exemption.

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