Payroll (Australia) - Do you calculate Payroll tax correctly?

Last updated by Tiago Araújo [SSW] over 1 year ago.See history

Payroll tax is a common wage-related expense that many businesses will have to account for in their month-to-month operations. The rules around when you begin paying for payroll tax and the amount you have to pay is dependent on your State Government's rules.

The Australian Government has general information about payroll tax, including affected businesses and possible exemptions. However, because the State Government laws take precedence, your business should take information from the State Government's website. For a general understanding of payroll tax, see the Australian Government's main website as follows:

It is important to stay up to date with the State Government's rules as they may change from time to time. The relevant State Government websites for NSW, QLD and VIC are as follows:

Tip: A common error businesses make is not realising the available exemptions for payroll tax. The most common exemption missed in calculating payroll tax is salary sacrificed items (excluding salary sacrificed superannuation). These items reduce the taxable wages. For example, the NSW State Government rule states payroll tax is applicable on the 'reduced wage that the employee pays income tax on'. You can refer to the relevant NSW page below.

Every state treats salary sacrifice differently for payroll tax purposes, so be sure to check your State Government's rules before processing your payroll tax return.

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