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Payroll tax is a state and territory tax on the total wages an employer pays, once those wages cross a tax-free threshold. There is no single national rate — every state and territory sets its own threshold and rate, so the same wages bill can produce very different bills depending on where your employees are. You only pay tax on the wages above the threshold, not the whole amount.
"Wages" is broader than base salary. It generally includes salary and wages, superannuation contributions, most allowances, bonuses and commissions, directors' fees, and the taxable value of fringe benefits. Contractor payments can also count if the arrangement is really employment in substance.
| State/Territory | Annual threshold | Headline rate | Notes |
|---|---|---|---|
| NSW | $1,200,000 | 5.45% | — |
| VIC | $1,000,000 | 4.85% | + mental-health levy over $10M |
| QLD | $1,300,000 | 4.75% | 4.95% if AU wages over $6.5M |
| WA | $1,000,000 | 5.50% | diminishing threshold to $7.5M |
| SA | $1,500,000 | 4.95% | sliding rate $1.5M–$1.7M |
| TAS | $1,250,000 | 4.00% | 6.1% on wages over $2M |
| ACT | $2,000,000 | 6.85% | highest threshold in the country |
| NT | $1,500,000 | 5.50% | — |
The calculator above uses each jurisdiction's headline rate. Surcharges, mental-health levies and the QLD large-employer rate apply only to very large payrolls.
Say you run a NSW business with a $2,000,000 annual wages bill. NSW has a $1,200,000 threshold and a 5.45% rate, so payroll tax is charged on $800,000 — that's $43,600 a year. Move the same payroll to Queensland (threshold $1,300,000, rate 4.75%) and the bill falls to $33,250, because both a higher threshold and a lower rate work in your favour.
Related businesses are usually grouped and share a single threshold, so you can't split a payroll across entities to stay under the line. You generally must register once your Australia-wide wages are likely to exceed the threshold, and lodge monthly with an annual reconciliation. Because thresholds are "deductible" only up to the point your wages get large, most businesses see their effective rate creep toward the headline rate as they grow.
Is superannuation subject to payroll tax? Yes — employer super contributions are counted as wages in every state and territory.
Do I pay payroll tax if I only have a few staff? Only if your total wages exceed your state's threshold. A single-state business under the threshold pays nothing, which is why small employers often never encounter it.
Which state's rules apply if staff work across borders? Wages are generally allocated to the state where the work is performed or where the employee is based, and you may have obligations in more than one jurisdiction.
This calculator uses current published rates from Australian government and regulator sources. The result is an estimate for general guidance — it does not constitute personal financial advice. For decisions about your circumstances, consult a registered financial adviser, tax agent, or other professional. See editorial standards for how DecisionLab sources and updates its calculator data.