Payroll tax thresholds by state, compared

Payroll tax is the tax most growing businesses don’t think about until they’re suddenly paying it. It’s set by each state and territory, not the ATO, and every one of them draws the line in a different place. This page puts all eight side by side, using figures read from each revenue office on 1 October 2026.

What are the payroll tax thresholds in each state for 2026–27?

State or territory	Annual threshold	Rate above the threshold	Notes
Victoria	$1,000,000	General rate; lower regional rate	Deduction phases out between $3m and $5m of wages
Western Australia	$1,000,000	5.5%	Threshold reduces $2 for every $13 over $1m; nil at $7.5m
New South Wales	$1,200,000	5.45%	Unchanged since 2022–23
Tasmania	$1,250,000	4% to $2m; 6.1% above	Same in 2025–26 and 2026–27
Queensland	$1,300,000	4.75% (4.95% over $6.5m wages)	1% regional discount to 30 June 2030
South Australia	$1,500,000	Graduated to 4.95% at $1.7m	4.95% above $1.7m
ACT	$1,750,000	6.75% to $20m	Cut from $2m on 1 July 2026; higher tiers for big payrolls
Northern Territory	$2,500,000	5.5%	6.5% only for $100m+ national wages from 1 July 2026

The headline threshold is a starting point, not the whole answer. Three things change what applies to you: phase-outs, interstate wages and grouping.

Why might my threshold be lower than the headline figure?

Phase-outs in Victoria and WA

Two states claw back the threshold from bigger employers.

• Victoria gives the full deduction up to $3 million of Australian wages, reduces it between $3 million and $5 million, and removes it at $5 million.
• Western Australia reduces the $1 million threshold by $2 for every $13 of wages above $1 million, so it’s gone at $7.5 million.

South Australia and Tasmania take the opposite approach, easing businesses in. SA uses a graduated rate between $1.5 million and $1.7 million; Tasmania charges 4% on wages between $1.25 million and $2 million before the 6.1% rate applies.

Paying wages in more than one state

If you employ in more than one state, each one generally gives you only the share of its threshold that matches the proportion of your total Australian wages paid there. Illustratively, a business paying $800,000 in Queensland and $400,000 in NSW has total wages of $1.2 million. Two-thirds of its wages are in Queensland, so it gets roughly two-thirds of Queensland’s $1.3 million threshold — about $867,000 — and is under it. One-third are in NSW, so it gets about $400,000 of the NSW threshold, which it has just reached.

The payroll tax threshold checker does this calculation for you.

Grouping

Related businesses — common ownership, shared employees, or one controlling another — can be grouped and treated as a single employer with one threshold. Owners with several companies or trusts should count them together.

Which states offer regional payroll tax concessions?

Two states give regional employers a better deal:

• Queensland — a 1% discount on the rate (3.75% or 3.95%) until 30 June 2030, for employers whose principal place of employment is in a listed regional area and who pay at least 85% of Queensland wages to regional employees. The Queensland guide lists the regions.
• Victoria — a much lower regional rate for employers based in regional Victoria who pay at least 85% of wages to regional employees. See the Victoria guide.

NSW, WA, SA, Tasmania, the ACT and the NT don’t offer a regional rate, though some run rebate schemes for particular hires from time to time.

What counts as wages for payroll tax?

More than the number on a payslip. Across the states, taxable wages generally include:

• Salaries, wages, commissions and bonuses.
• Employer super contributions.
• Allowances and fringe benefits.
• Certain payments to contractors, where the arrangement looks like employment under the state’s contractor provisions.
• Payments through some employment agencies.

Each revenue office publishes its own rules, so check the detail for your state before relying on a rough total.

Planning the cash once you cross the line

Payroll tax is usually lodged and paid monthly once you’re registered, with an annual reconciliation. For a business that has just grown past the threshold, the first few payments can arrive while the revenue from new staff is still ramping up. That’s why owners often plan the cash side before they hire, not after.

Our payroll tax registration checklist walks through the steps. If you need working capital to carry the extra costs, unsecured and line-of-credit options for trading businesses typically run from $5,000 to $500,000, and property-secured loans from $20,000 to $5 million suit larger plans. You can see what your business could qualify for without a credit check.

Growing past the threshold? Let’s plan the cash

Crossing the payroll tax line usually means the business is doing well. Keeping it that way is about timing: the wages, the tax and the revenue don’t always arrive together. Tell us your state, your wage bill and what you’re planning. It takes about a minute, involves no credit check, and your details stay with one team rather than being sent to a list of lenders. A real person calls you to talk it through. Please fill in the form accurately so we can find the right option on the first call.

Check what your business could qualify for →