The payroll tax calculator
Estimate only. It applies the headline 2025-26 threshold and rate(s) and does not model deduction phase-outs, surcharges (such as Queensland's mental health levy), grouping across entities or multi-state apportionment, so your actual liability may differ, often higher for mid-sized payrolls. Confirm with the relevant State Revenue Office or your BAS agent.
Not sure which threshold or rate applies, especially across borders or as a group? True Tally keeps payroll accurate and reconciled across Australia.
Book a free callHow payroll tax works
Payroll tax is a state and territory tax, administered by each State Revenue Office, not the ATO. Each jurisdiction sets its own tax-free threshold and rate, and only Victoria and Queensland price regional and metropolitan employers differently. Thresholds apply per business or per related group, and employing staff across state lines can create a liability in each state. For the full comparison and sources, see our payroll tax by state guide, and for the contractor payroll-tax risk in medical and dental practices, see SFA arrangements.
Frequently asked questions
How is payroll tax calculated?
Payroll tax applies to your total Australian taxable wages above the state tax-free threshold, at that state's rate. For example, a NSW employer with $1.5 million in wages pays 5.45% on the $300,000 above the $1.2 million threshold, about $16,350. Taxable wages include superannuation, bonuses, allowances and directors' fees.
Which Australian state has the lowest payroll tax rate?
On the headline rate, Tasmania starts at 4.0% (for wages between $1.25M and $2M) and Queensland is 4.75% up to $6.5M. For regional employers, Victoria's regional rate of 1.2125% is the lowest. The threshold and any surcharges also matter.
Do grouped businesses share one threshold?
Yes. The threshold applies to a business, or where businesses are related, to the whole group under each state's grouping provisions. Grouped businesses share one threshold rather than one each, a common trap as a business expands or restructures.
Do I pay payroll tax in every state where I have employees?
Potentially. Payroll tax follows where the work is performed under each state's nexus rules, so employing people in more than one state can mean registering and paying in each, each with its own threshold and rate.