Payroll tax is a state tax levied on salaries that have been paid or are about to be paid. Payroll tax is owed when an employer’s (or a group of employers’) total Australia-wide taxable salaries exceed the threshold. For example, South Australian earnings, as well as any interstate wages, are included in an employer’s taxable wages for the entire country. The Payroll Tax Act 2009 oversees payroll tax collection and administration in South Australia.
Similarly, in Western Australia payroll tax act 2002 oversees tax collection and administration. It goes on as it is different with the Victoria, Queensland, northern territory, etc.
Payroll Tax details in Australia 2022
As it differs state by state, let’s check it out accordingly:
Victoria
Starting from July 2021 till June 2022, employers are obligated to for the annual deduction of $700,000 and monthly deduction of $58,333 on the rate of 4.85% and 1.2125% for the regional Victorian employers.
Western Australia
For the western Australians, it might be different from Victorian citizens. As starting from 1 July 2020, the threshold you will be having is $1,000,000 (annually) and $83,333 (monthly).
Anyone more than $1,000,000 but less than $7.5million (annually) threshold diminishing ruling applies to them. Moreover, no threshold was granted to ones above $7.5million.
The rates you are looking over here are following:
- 5.5% – More than $1,000,000 but less than $7.5 million
- 5.5% – $7.5 million or more but not exceeding $100 million
- Tier 4 rate* – More than $100 million but not exceeding $1.5 billion
- Tier 5 rate* – More than $1.5 billion
South Australia
In the state of South Australia, applicable from 1 January 2019, the threshold is $1500000 (annually) and $125 000 (monthly). However, when we talk about the deduction entitlement, you will expect Up to $600000 (annually) and Up to $50000 (monthly). And for the rate, it is variable as it can be from 0% to 4.95% depending on wages paid for the full financial year.
Northern territory
As for the northern territory, the applicable payroll tax from July 2021 to June 2022 is $1,500,000 (annually), and the monthly threshold is $125,000. The rate applied by the authorities is 5.5%.
Queensland
Queensland has the payroll tax regulations from 1 July 2019 and the threshold is $1,300,000 (annually), $108,333 (monthly) and $25,000 (weekly). The wage from 0 to 1,250,000 ha 0% rate, however, the wages ranging from 1,250,001 to 2,000,000 will be applicable for 4% rate, and if your wage is above 2,000,001 then the applicable rate will be 6.1%.
Regional employers may be entitled to a 1% discount on the rate until 30 June 2023.
Payment and dues
You can always check with your Payroll tax ERP for accuracy if it automatically complies with the regulation. Still, the due date for each monthly payment or nil return is seven days following the month’s end. If the seventh day comes on a weekend or a public holiday, the deadline is the following working day.
Yes, the annual reconciliation is required every year on July 28th. And the deadline is the next working day if the 28th falls on a weekend or holiday.
The 2021 yearly reconciliation deadline has been extended to January 14, 2022, to help clients deal with the impacts of COVID-19.
Bottom line
Hopefully, the detail was helpful. Just in case you need more accuracy with your calculation, you can always rely on the single touch payroll STP solution by DHRP. Or, if you are looking for more information about the tax, rates, payroll software, payroll process or even payroll tax vs. income tax Australia, you are most welcome to discuss it with us!
