27 March 2026
Payroll Tax by State — Australia 2026 Guide
A complete guide to payroll tax thresholds, rates, and lodgement requirements for all Australian states and territories in 2026.
What is payroll tax?
Payroll tax is a state and territory tax imposed on employers whose total Australian wages exceed a threshold. It is not a federal tax — each state and territory administers its own payroll tax with its own threshold, rate, and lodgement requirements.
The key point: payroll tax is assessed on Australian-wide wages, not just wages in the state where the liability arises. If your business operates in multiple states, you may be liable in multiple jurisdictions.
Who pays payroll tax?
Payroll tax applies to employers (and groups of related entities) whose total Australian wages exceed the applicable state/territory threshold. Wages for payroll tax purposes typically include:
- Salaries and wages
- Director fees and other remuneration
- Superannuation contributions (in most jurisdictions)
- Fringe benefits
- Contractor payments (subject to deemed employee provisions in each state)
Leave payments, redundancy payments, and allowances are generally included, though the treatment varies by jurisdiction.
Payroll tax rates and thresholds 2025–26
Important disclaimer: Rates and thresholds change annually. The figures below are indicative for the 2025–26 financial year. Always confirm current rates with your state revenue office or a registered tax agent. Links to each state revenue office are provided below.
| State/Territory | Annual threshold (approx.) | Rate (approx.) | Revenue office |
|---|---|---|---|
| New South Wales | $1.2 million | 5.45% | Revenue NSW |
| Victoria | $700,000 | 4.85% (regional: 1.2125%) | SRO Victoria |
| Queensland | $1.3 million | 4.75% | Queensland Revenue Office |
| Western Australia | $1 million | 5.5% | Revenue WA |
| South Australia | $1.5 million | 4.95% | RevenueSA |
| Tasmania | $2 million | 4% | State Revenue Office Tasmania |
| Northern Territory | $1.5 million | 5.5% | Department of Treasury and Finance NT |
| Australian Capital Territory | $2 million | 6.85% | ACT Revenue Office |
These figures are indicative only. Confirm current thresholds and rates directly with the relevant state revenue office.
Grouped entities
Payroll tax grouping provisions mean that related entities (companies under common control, businesses with common employees, or businesses that share premises) may be grouped together for payroll tax purposes. The combined wages of all group members are assessed against the threshold, then the liability is apportioned across each member.
Grouping rules are complex and vary by state. If you operate multiple related entities, seek advice from a registered tax agent.
Interstate wage apportionment
If your employees work in multiple states, wages must be apportioned to the state where the employee is "based" for payroll tax purposes. The rules for determining the state of nexus differ between jurisdictions, but generally follow the employee's principal place of work.
Lodgement and payment obligations
Payroll tax is typically lodged monthly (with an annual reconciliation due in July) above a certain wage threshold. Smaller employers may be permitted to lodge annually. The monthly return is due on the 7th of the following month in most states.
Non-lodgement or late payment attracts interest and penalties. The annual reconciliation is the most complex — it reconciles estimated monthly payments against actual annual wages and identifies any under- or overpayment.
Payroll tax exemptions
Wages paid to certain employee types are exempt from payroll tax in most jurisdictions:
- Apprentices and trainees (rules vary by state)
- Wages paid by certain non-profit organisations
- Parental leave wages (some states)
- Wages subsidised under government employment programs
Exemption rules vary significantly by state. Check the relevant revenue office for current exemptions.
Payroll tax and Payday Super (from July 2026)
Superannuation contributions are included in the payroll tax wage base in most states. From July 2026, super contributions will be paid more frequently (on each pay day rather than quarterly). This changes the timing of payroll tax calculations — confirm with your state revenue office whether more frequent super payments affect your monthly payroll tax return.
How ERNVO handles payroll tax
ERNVO calculates payroll tax obligations for all 8 Australian states and territories, based on each employee's work location. The annual reconciliation and monthly return figures are available in the Payroll Tax Reports section, ready for lodgement with the relevant state revenue office.
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