Nearing the payroll tax threshold? Your registration checklist

Crossing the payroll tax threshold is a milestone most owners don’t celebrate. It usually arrives on the back of good news — a big contract, a second site, a team that finally has enough hands — and then adds a new monthly bill. The owners who handle it well are the ones who see it coming. This checklist walks through the steps from “we might be close” to “registered, paying, and planned for”.

Step 1: Know your state’s threshold

Payroll tax is a state and territory tax, so the first question is where your wages are paid. For 2026–27:

State or territory	Annual threshold
Victoria	$1,000,000
Western Australia	$1,000,000
New South Wales	$1,200,000
Tasmania	$1,250,000
Queensland	$1,300,000
South Australia	$1,500,000
ACT	$1,750,000 (cut from $2m on 1 July 2026)
Northern Territory	$2,500,000

If you’re in the ACT with wages between $1.75 million and $2 million, note that the July 2026 change may have brought you into payroll tax without any change to your business. Our ACT guide covers it.

For rates, phase-outs and regional discounts, see the full payroll tax comparison.

Step 2: Count wages the way the revenue office does

Payroll tax “wages” are wider than salaries. Across the states, they generally include:

• Salaries, wages, overtime, commissions and bonuses.
• Employer superannuation contributions, including salary sacrifice.
• Allowances and fringe benefits.
• Directors’ fees.
• Some contractor payments, under each state’s contractor provisions.
• Some payments through employment agencies.

Owners who compare their gross pay figure with the threshold often underestimate. Super alone can add a significant amount to your total. Use your payroll software’s reports, then add super and anything else that counts.

Contractors deserve a closer look. If contractors work mainly for you, supply labour rather than a finished result, or look like employees in practice, their payments may be treated as wages. Each state has exemptions — for example, for contractors who provide services to the public generally — but the rules are detailed. Review your contractor list with your accountant before you assume they’re outside the net.

Step 3: Check whether you’re grouped

Every state has grouping rules that treat related businesses as one employer, sharing one threshold. You’re likely to be grouped if:

• The same people own or control more than one company or trust.
• Businesses share employees or use each other’s staff.
• One business controls another.

Grouping stops a business splitting into several entities to stay under the threshold. If you run more than one entity, add their wages together before comparing with the threshold. One member of the group is nominated as the “designated group employer” to claim the threshold.

Step 4: Watch the monthly figure, not just the annual one

Most states test wages monthly against a monthly share of the annual threshold, as well as annually. Victoria’s monthly threshold, for example, rose from $75,000 to $83,333 when its annual threshold went up to $1 million in July 2025, and the ACT’s monthly figure from 1 July 2026 is $145,833.33. Tasmania works out its monthly amount from the number of days in the month.

That means a business can cross the line part-way through the year, especially if wages jump when new staff start or bonuses are paid. Track wages monthly as you approach the threshold, and read your state’s registration rules so you know how soon after crossing you must register.

Step 5: Account for interstate wages

If you pay wages in more than one state, each state generally gives you only the share of its threshold that matches the proportion of your total Australian wages paid there. You may need to register in a state where your wages look small.

Illustratively, a business paying $900,000 in Victoria and $300,000 in NSW has total wages of $1.2 million. Three-quarters of its wages are in Victoria, so it gets roughly three-quarters of Victoria’s $1 million threshold — $750,000 — and is over it. One-quarter are in NSW, so it gets $300,000 of the NSW threshold and sits right on the line. Our payroll tax checker does this calculation, and the guide to moving a business interstate covers the wider set of registrations.

If you’re partway through this and the cash is already tight, see what your business could qualify for — enquiring doesn’t touch your credit file.

Step 6: Register with your revenue office

Registration is done online through your state or territory revenue office. You’ll typically need:

• Your ABN and entity details, and those of any group members.
• The date you first exceeded the threshold.
• Your wage figures, by month.
• Details of wages paid in other states.
• Bank details for payments.

Register promptly. Revenue offices can charge the tax you should have paid, plus interest and penalties, if registration is late. If you discover you should have registered earlier, speak to your accountant about a voluntary disclosure; it’s generally treated more favourably than being picked up in an audit.

Step 7: Understand returns and reconciliation

Once registered, most employers lodge and pay monthly, then complete an annual reconciliation after 30 June, which squares the year’s payments with the actual liability and applies your full-year threshold. Some states allow annual lodgement for small liabilities. Your revenue office will confirm your lodgement frequency and due dates when you register.

Put the dates in the same calendar as BAS, PAYG withholding and super, because they tend to cluster around the same time of the month.

Step 8: Check exemptions, rebates and regional discounts

Before you pay, check whether anything reduces your bill:

• Regional concessions. Queensland offers a 1% discount until 30 June 2030 for eligible regional employers, and Victoria has a lower regional rate for businesses based in regional Victoria.
• Apprentices and trainees. Several states have offered exemptions or rebates for particular apprentices, trainees or new hires within set dates. Tasmania’s employer guide, for example, lists rebate schemes with specific eligible employment periods.
• Exempt employers and wages. Certain organisations and some types of wages are exempt under each state’s rules.

Step 9: Plan the cash

This is where most of the stress comes from. A rough monthly estimate is simple for states without phase-outs:

(Annual wages − your share of the threshold) × rate ÷ 12

Illustrative example (NSW): a Newcastle building company expects wages of $1.5 million this year. That’s $300,000 above the $1.2 million threshold. At 5.45%, payroll tax is about $16,350 for the year, or roughly $1,360 a month.

Victoria, WA, SA and Tasmania need more care because of phase-outs, graduated bands or tiers, and Queensland’s rate depends on total wages and regional eligibility. Your accountant or the revenue office calculator will give the precise figure.

Then look at timing. New staff cost money from their first week; the revenue they generate may take months. Payroll tax adds to that gap. The businesses that cope best:

• Build payroll tax into quotes and pricing for new contracts.
• Set aside a percentage of each month’s wage bill in a separate account.
• Arrange working capital before they hire, not after the first return is due.

Step 10: Review every July

Thresholds and rates change at state budgets, usually from 1 July. Victoria raised its threshold in 2025; the ACT lowered its threshold in 2026. Review your position each July, and again whenever you open a new site, take on a big contract or restructure your entities.

When does finance make sense?

Payroll tax is a sign of growth, and growth needs cash. Common reasons employers borrow around the threshold:

• Carrying wages for new staff on a contract that pays in arrears.
• Smoothing the first returns while pricing catches up.
• Catching up on payroll tax that should have been paid earlier, considered case by case alongside any ATO debt.
• Funding a second site that pushes wages over the line.

Unsecured and line-of-credit options for trading businesses typically run from $5,000 to $500,000, worked out from your turnover and bank statements. With property as security, lending spans $20,000 to $5,000,000 for bigger plans.

Growing fast? Let’s keep the cash in step

Crossing the threshold means your team is growing, and that’s worth protecting. If the timing of wages, tax and customer payments isn’t lining up, tell us about it. It needs only a minute or so, there’s no credit check to enquire, and your details go to our team only — not out to a crowd of lenders. A real person who understands your state’s rules will call to talk through the options. Please give us accurate figures on the form so the conversation starts in the right place.

See if you qualify for working capital →