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Payroll Tax – what, who, why & how much?

The employers’ world is complex and difficult to navigate, to say the least. Dealing with some employees can be hard enough but add to the mix tax and superannuation compliance tasks, and the job can become very tricky indeed! Most employers would be across PAYG withholding tax, payment summaries and super requirements but there is also one other tax that is perhaps lesser known – payroll tax. Not every employer needs to pay this tax but every employer should know what it is and when it should be paid.

Payroll-Taxes

What is Payroll Tax?

Payroll tax is a tax on wages paid which exceed state-based exemption thresholds. It is calculated on monthly total wages paid and is self-assessed. Payroll tax is paid to state/territory Revenue Offices (see resources section).

Who has to pay it and why?

Employers who pay wages exceeding the monthly exemption threshold that applies in their relevant state or territory, must pay payroll tax. Exemption thresholds vary between states. This also applies to those who employ staff across different states. Payments must be made at the agreed time as stipulated by the relevant State Revenue Office i.e. monthly, quarterly or annually.

How much do you pay?

The easiest way to show you how much is payable is by sharing the following link from Payroll Tax Australia:

Payroll Tax Rates and Thresholds

This page shows you a map of Australia which allows you to click on your relevant state/territory and be shown the current rates and thresholds as well as historical rates and thresholds should you need to see them. This is an awesome resource!

Resources

The following resources are from the Payroll Tax Australia website. I suggest you visit this website if you require more information.

  • Contact page – provides telephone numbers and email addresses for State Revenue Offices in each state/territory.
  • Revenue Office websites by state/territory:
  1. ACT Revenue Office
  2. NSW Office of State Revenue
  3. Northern Territory Revenue
  4. Qld Office of State Revenue
  5. Revenue SA
  6. TAS State Revenue Office
  7. VIC State Revenue Office
  8. WA Office of State Revenue
  1. The Basics
  2. Registration
  3. Employing in multiple jurisdictions
  4. Grouping
  5. Understanding the annual deduction entitlement
  6. Annual deduction entitlement – QLD & NT
  7. Understanding the monthly deduction entitlement
  8. Lodging your monthly return
  9. Lodging your annual return
  • Webinars – the following webinars are available to watch:
  1. Understanding the Basics – what it is and how it works
  2. Allowances, FBT, Exemptions and Rebates
  3. Contractors
  4. Groupings

In summary, payroll tax is a state-based tax paid on wages exceeding the monthly exemption threshold. It is paid to the revenue office in your relevant state. For further information on the subject, I suggest you review the resources listed above and/or ask for advice from your tax professional.