Payroll Tax Calculator Australia (2026–27)
Calculate employer state payroll tax liabilities across NSW, VIC, QLD, WA, SA, TAS, ACT, and NT under current State Revenue rules. Model state tax-free thresholds, group employer rules, contractor provisions, and mental health surcharges.
Includes gross salaries, superannuation, bonuses, fringe benefits, and contractor wages.
If checked, threshold is set to $0 as threshold is claimed by main group entity.
Estimated Annual NSW Payroll Tax
$70,850
Calculated at 5.45% tax rate in NSW.
Estimated Monthly Lodgement Payment
$5,904
Due on the 7th of each month.
Effective Payroll Tax Rate
2.83%
NSW State Payroll Tax Breakdown
1. The Australian State Payroll Tax Framework (2026–27)
Payroll Tax is governed by harmonized state legislation (e.g. Payroll Tax Act 2007 NSW / VIC).
Employers pay state payroll tax when their total Australian taxable wage bill (wages, super, bonuses, fringe benefits) exceeds state exemption thresholds.
2. State-by-State Payroll Tax Threshold & Rate Benchmarks
| State Jurisdiction | Exemption Threshold | Payroll Tax Rate | Tax on $3M Payroll | Effective Tax Rate |
|---|---|---|---|---|
| New South Wales (NSW) | $1,200,000 Threshold | 5.45% Flat Rate | $98,100 Payroll Tax | 3.27% Effective Rate |
| Victoria (VIC) | $900,000 Threshold | 4.85% + Mental Health Surcharge | $112,850 Payroll Tax | 3.76% Effective Rate |
| Queensland (QLD) | $1,300,000 Threshold | 4.75% (Tiered) | $80,750 Payroll Tax | 2.69% Effective Rate |
| Western Australia (WA) | $1,000,000 Threshold | 5.50% (Tiered) | $110,000 Payroll Tax | 3.67% Effective Rate |
3. The Mathematics of Interstate Wage Allocation & Thresholds
Annual State Payroll Tax (Tax_state) for local state wages (W_local), total Australian wages (W_aus), statutory threshold (T_state), and state rate (r_state %) is:
Example NSW Calculation ($3,000,000 100% NSW Wage Bill @ $1,200,000 Threshold):
- Annual Tax-Free Threshold Exemption: $1,200,000.00.
- Taxable NSW Wage Amount: $3,000,000 - $1,200,000 = $1,800,000.00.
- NSW Payroll Tax Payable (5.45%): $1,800,000 × 5.45% = $98,100.00 / year ($8,175 / month).
4. Step-by-Step Guide to Calculating State Payroll Tax
Sum Australia-Wide Gross Taxable Wages & Superannuation
Sum total wages, bonuses, super contributions, and fringe benefits across all Australian states.
Determine State Wage Breakdown & Grouping Status
Allocate total wages to specific state revenue offices (NSW, VIC, QLD, WA, SA, TAS, ACT, NT).
Calculate Pro-Rata State Tax-Free Exemption Threshold
Pro-rate the local state threshold ratio (Local State Wages ÷ Total Australian Wages).
Apply Statutory State Payroll Tax Rates & Surcharges
Multiply taxable wages above threshold by the statutory state rate (e.g. 5.45% NSW, 4.85% VIC).
Lodge Monthly State Payroll Tax Returns & Annual Reconciliation
Lodge monthly state revenue returns by the 7th of each month and complete annual reconciliation by 28 July.
5. Payroll Tax Mistakes & Checklist
Failing to Register for State Payroll Tax When Wages Cross Thresholds
Failing to register when payroll crosses $1.2M in NSW or $900k in VIC, triggering 5 years of back-taxes and 25% penalties.
Claiming Full Tax-Free Thresholds Across Multiple Grouped Entities
Claiming separate $1.2M thresholds for three related Pty Ltd companies, breaching ATO and State Revenue grouping laws.
Excluding Employer Superannuation Guarantee Contributions from Wages
Calculating payroll tax on base salary only, forgetting that mandatory 12.0% employer super is taxable wages.
Omitting Payments to Regular Dependent Contractors
Excluding payments to long-term sole trader contractors who derive >80% of revenue from your company.
Payroll Tax Compliance Checklist
State Revenue Office Payroll Tax Registration
Register with State Revenue Offices within 7 days of the month total wages cross monthly thresholds.
Group Employer Control & Common Directorship Audit
Audit common shareholdings and directorships across entities to avoid severe non-grouping penalties.
Contractor Payment Taxability Assessment
Review contractor agreements against statutory contractor provisions to determine payroll tax inclusion.
7th of Month Monthly Return & 28 July Annual Reconciliation
Set calendar alerts for monthly revenue office lodgments (7th) and annual reconciliation (28 July).
6. Annual State Payroll Tax Compliance Timeline
State Payroll Tax Annual Threshold Reset
New state threshold amounts and surcharge tiers take effect across state revenue offices.
Monthly State Payroll Tax Lodgment
Lodge monthly payroll tax return and remit tax due to State Revenue Office (Revenue NSW, SRO VIC, QRO).
Annual Payroll Reconciliation Preparation
Reconcile total payroll, contractor payments, superannuation, and fringe benefits.
Annual State Payroll Tax Reconciliation
Lodge Annual Payroll Tax Reconciliation; pay any final adjustment balance due for the financial year.
Disclaimer: This Payroll Tax calculator and guide are provided for general educational and informational planning purposes only. State exemption thresholds (NSW $1.2M, VIC $900k, QLD $1.3M), tax rates, grouping laws, and mental health levies reflect 2026–27 State Revenue Office guidelines. This page does not constitute formal tax or legal advice.
Charlotte Smith
Senior Personal Finance & Taxation Specialist at AussieSpot
Charlotte Smith is the lead personal finance advisor and workplace specialist at AussieSpot. Charlotte has over 12 years of experience helping Australian households build budgets, plan savings goals, and manage living costs.
Frequently Asked Questions (FAQ)
What is Payroll Tax and who pays it in Australia?
Payroll Tax is a state and territory tax levied on Australian employers whose total Australia-wide taxable wages exceed the annual exemption threshold in a specific jurisdiction. Payroll tax is paid by employers, NOT deducted from employee pay.
What components are included in "Taxable Wages" for payroll tax?
Taxable wages include gross salaries, wages, overtime, commissions, bonuses, employer superannuation guarantee contributions, fringe benefits (grossed-up Type 2 value), director fees, and payments to certain relevant contractors.
What are the Payroll Tax Exemption Thresholds by State for 2026–27?
State thresholds vary significantly: NSW ($1,200,000 @ 5.45%), VIC ($900,000 @ 4.85% + surcharges), QLD ($1,300,000 @ 4.75%–4.95%), WA ($1,000,000 @ 5.5%), SA ($1,500,000 @ 4.95%), TAS ($2,000,000 @ 4.0%–6.1%), ACT ($2,000,000 @ 6.85%), and NT ($1,500,000 @ 5.5%).
How do "Grouping Provisions" affect related companies under payroll tax rules?
Under statutory state grouping rules, related companies (e.g. parent company, subsidiaries, or entities with common control/directors) are grouped together as a single employer. The group gets only ONE tax-free threshold to share across all entities.
How does interstate wage allocation work for multi-state employers?
If an employer pays wages across multiple Australian states, the tax-free threshold in each state is reduced proportionally based on the ratio of local state wages to total Australia-wide wages.