Guide
Payroll tax by state: thresholds and rates for 2026-27
Updated
Payroll tax is the on-cost most employers meet by surprise, because it does not exist until your total Australian wages cross a threshold that differs in every jurisdiction.
It is eight separate taxes, not one
Every state and territory levies its own payroll tax under its own Act, with its own threshold, rate, grouping rules and surcharges. There is no national rate to quote. What follows is only the jurisdictions whose official revenue office pages we read on the date shown above.
| Jurisdiction | Annual threshold or deduction | Rate | Source |
|---|---|---|---|
| New South Wales | $1,200,000 tax-free threshold | 5.45% | Revenue NSW, 1 July 2026 to 30 June 2027 |
| Victoria | $1,000,000 maximum deduction | 4.85%, or 1.2125% for regional Victorian employers | State Revenue Office Victoria, from 1 July 2025 onward |
| Queensland | $1.3 million threshold | 4.75% up to $6.5 million of Australian taxable wages, 4.95% above it | Queensland Revenue Office |
| Tasmania | First $1,250,000 taxed at nil | 4% from $1,250,001 to $2,000,000, then 6.1% | State Revenue Office Tasmania, 2026-27 |
Sources for the table, all read on the date at the top of this page: Revenue NSW, State Revenue Office Victoria, Queensland Revenue Office and State Revenue Office Tasmania.
Western Australia, South Australia, the ACT and the Northern Territory are deliberately absent. Their revenue office pages were unreachable when this page was written, and we do not publish a threshold we have not read. Go to your own revenue office for those four before you register or budget.
What counts as wages
Taxable wages are wider than salary. Revenue NSW lists bonuses and commissions, contractor payments, directors' wages, employment agency payments, taxable fringe benefits, salary sacrifice, shares and options, some termination payments, and superannuation, stating plainly that all superannuation contributions are liable for payroll tax (Revenue NSW: taxable wages). That is why the calculator applies your payroll tax rate to salary plus superannuation rather than salary alone.
Thresholds are about the business, not the hire
- The threshold applies to your total Australian wages, not your wages in one state, and grouped businesses share a single threshold.
- Cross the threshold and only the excess is taxed, so the marginal cost of one more hire is close to the headline rate while the average cost is much lower.
- Victoria phases out its deduction between $3,000,000 and $5,000,000 of Australian taxable wages at a phase-out rate of 50% from 1 July 2025, with no deduction above $5,000,000.
- Surcharges sit on top in some jurisdictions: Victoria applies combined surcharges of 1% above $10 million and 2% above $100 million of national payroll, and Queensland applies a mental health levy above its own thresholds.
Verify your jurisdiction's current figures with its revenue office before you lodge. State budgets move these numbers, and this page states the position on its updated date, corrected in place when it changes.