Archived News - 2005
2005-08-25
Your Employee Obligations - Payroll Tax
If you employ people in a state or territory, you may need to consider payroll tax. This is a state and territory tax that is levied on wages paid or payable by you as an employer.
As each state and territory has its own legislation with differing provisions, rates of tax and levels of exemption, it's best to consider getting advice about whether you have to pay this tax.
As a general guide, if you pay wages to someone in any state or territory, you are liable for payroll tax in that state or territory if your Australia wide wages exceed that state's or territory's general annual exemption level for the year (1 July - 30 June).
If you are part of a group of related employers, your Australia wide wages are the total wages for your group and not just your entity.
| State/territory | Exemption level | Rate |
|---|---|---|
| ACT | $1,250,000 | 6.85% |
| New South Wales | $600,000 | 6.00% |
| Northern Territory | $1,000,000 | 6.20% |
| Queensland | $850,000 | 4.75% |
| South Australia | $504,000 | 5.50% |
| Tasmania | $1,010,000 | 6.10% |
| Victoria | $550,000 | 5.25% |
| Western Australia | $750,000 | 5.50% |
(Note: These exemption levels and rates are subject to change - check with your state or territory revenue office for the latest figures.)
In practice, states and territories require you to register and pay payroll tax when your total Australian wages for that state or territory exceeds either a monthly or weekly exemption level. An annual reconciliation is performed at the end of the financial year.
For example, if you employ staff in New South Wales, you have to register and pay payroll tax if your Australia wide wages exceed $50,000 (1/12th of $600,000) in any month.
As you can see, unless you are a small business with a sizeable Australia wide payroll, you may not have to worry about payroll tax. But like all things in tax, it's best to keep an eye on it just in case.
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