NSW charges payroll tax at 5.45% above an annual tax-free threshold of $1,200,000 for 2026-27. Victoria’s standard maximum tax-free threshold is $1,000,000 annually, while Queensland’s current threshold is $1.3 million; both states apply separate rules to larger national payrolls. These figures come from the relevant state revenue authorities and were checked on 2026-10-01.
What are the payroll tax thresholds and rates in NSW, Victoria and Queensland?
| State | Payroll basis or threshold | Rate | Official source and checked date |
|---|---|---|---|
| NSW | Tax applies only to wages above the annual tax-free threshold of $1,200,000 for 1 July 2026–30 June 2027 | 5.45% | Revenue NSW, Payroll tax thresholds and rates, checked 2026-10-01 |
| Victoria | Maximum annual deduction of $1,000,000; monthly deduction of $83,333, applying from 1 July 2025 onward | 4.85% | State Revenue Office Victoria, Payroll tax (current rates), checked 2026-10-01 |
| Victoria | Regional Victorian employer rate applying from 1 July 2025 onward | 1.2125% | State Revenue Office Victoria, Payroll tax (current rates), checked 2026-10-01 |
| Queensland | Current threshold of $1.3 million in annual Australian taxable wages | 4.75% when Australian taxable wages are $6.5 million or less | Queensland Revenue Office, Payroll tax rates and thresholds, checked 2026-10-01 |
| Queensland | Rate applies when Australian taxable wages exceed $6.5 million | 4.95% | Queensland Revenue Office, Payroll tax rates and thresholds, checked 2026-10-01 |
NSW publishes a threshold specifically for the 2026-27 year. Victoria’s published maximum deduction and Queensland’s current threshold should be read together with the higher-payroll rules below.
How does Victoria phase out its tax-free threshold?
Victoria reduces the tax-free threshold progressively for employers and groups whose total annual taxable Australian wages are between $3 million and $5 million. Employers and groups with total annual taxable Australian wages above $5 million are not eligible for any tax-free threshold.
| Condition | Treatment | Official source and checked date |
|---|---|---|
| Total annual taxable Australian wages between $3 million and $5 million | The tax-free threshold is progressively reduced as wages increase | State Revenue Office Victoria, Threshold and phase-out rate, checked 2026-10-01 |
| Total annual taxable Australian wages above $5 million | No tax-free threshold is available | State Revenue Office Victoria, Threshold and phase-out rate, checked 2026-10-01 |
| 2024-25 financial year | Phase-out rate is 45% | State Revenue Office Victoria, Threshold and phase-out rate, checked 2026-10-01 |
| From the 2025-26 financial year onward | Phase-out rate is 50% | State Revenue Office Victoria, Threshold and phase-out rate, checked 2026-10-01 |
What surcharges apply to larger payrolls in Victoria?
Businesses paying Victorian taxable wages may be subject to two combined surcharges when their national payroll exceeds the relevant annual threshold.
| National Australian wages | Combined surcharge | How it applies | Official source and checked date |
|---|---|---|---|
| Above $10 million | 1% | Applies only to the Victorian share of wages over the threshold | State Revenue Office Victoria, Payroll tax (current rates), checked 2026-10-01 |
| Above $100 million | 2% | Applies only to the Victorian share of wages over the threshold | State Revenue Office Victoria, Payroll tax (current rates), checked 2026-10-01 |
The first monthly threshold is $833,333. The mental health and wellbeing surcharge commenced on 1 January 2022, while the temporary COVID-19 debt payroll tax surcharge applies from 1 July 2023 to 30 June 2033. These dates and rules are stated by the State Revenue Office Victoria and were checked on 2026-10-01.
Does Queensland offer a regional payroll tax discount?
Eligible regional employers in Queensland receive a discount of 1% on the payroll tax rate. The discounted rate is 3.75% where Australian taxable wages are $6.5 million or less and 3.95% where Australian taxable wages exceed $6.5 million.
To qualify, the employer’s main place of business must be in a regional area of Queensland and at least 85% of its Queensland taxable wages must be paid to regional employees. These rates apply from 1 July 2019 to 30 June 2030, according to the Queensland Revenue Office, checked 2026-10-01.
How is Queensland’s mental health levy calculated?
Queensland’s mental health levy uses annual Australian taxable wages to determine whether the levy applies. It is then applied proportionately to Queensland taxable wages exceeding the relevant threshold.
| Annual Australian taxable wages | Levy rate | Official source and checked date |
|---|---|---|
| $10 million or less | No mental health levy | Queensland Revenue Office, Calculating the mental health levy, checked 2026-10-01 |
| More than $10 million | 0.25% primary rate | Queensland Revenue Office, Calculating the mental health levy, checked 2026-10-01 |
| More than $100 million | Additional rate of 0.5% | Queensland Revenue Office, Calculating the mental health levy, checked 2026-10-01 |
What operational details are not stated on the official pages?
The official pages reviewed do not state the specific monthly payroll tax return due dates. Victoria’s payroll tax registration deadline and penalties for failure to register, along with late-payment penalties and interest rates for all three states, are also not stated on the official pages.
Frequently asked questions
Does NSW payroll tax apply to the entire payroll?
No. Revenue NSW states that payroll tax is calculated only on wages above the annual tax-free threshold. For 1 July 2026–30 June 2027, that threshold is $1,200,000 and the rate is 5.45%; checked 2026-10-01.
What is Victoria’s standard payroll tax rate?
The standard rate is 4.85%, with maximum annual and monthly tax-free deductions of $1,000,000 and $83,333 respectively. The State Revenue Office Victoria also publishes a rate of 1.2125% for regional Victorian employers; checked 2026-10-01.
When does Queensland use its higher payroll tax rate?
Queensland applies a rate of 4.75% where annual Australian taxable wages are $6.5 million or less and 4.95% where they exceed $6.5 million. Its published threshold is $1.3 million in annual Australian taxable wages; Queensland Revenue Office, checked 2026-10-01.
Can a Queensland regional employer pay less than the standard payroll tax rate?
An eligible regional employer can receive a discount of 1%, producing a rate of 3.75% or 3.95%, depending on Australian taxable wages. Eligibility includes having the main place of business in regional Queensland and paying at least 85% of Queensland taxable wages to regional employees; Queensland Revenue Office, checked 2026-10-01.
Sources
- Revenue NSW — Payroll tax thresholds and rates
- State Revenue Office Victoria — Payroll tax (current rates)
- State Revenue Office Victoria — Threshold and phase-out rate
- Queensland Revenue Office — Payroll tax rates and thresholds
- Queensland Revenue Office — Payroll tax discount for regional businesses
- Queensland Revenue Office — Calculating the mental health levy