What is payroll tax and do I have to pay it?

Payroll tax is a tax that is often overlooked and in some circumstances until it is too late.

Basically, payroll tax is a tax on wages paid. The problem faced by many however, is determining how much to pay and to whom. This is because payroll tax is a State regulated tax with each state having different regulations, rates and thresholds.

In Queensland if you have wages of more than $1,100,000 a year you may be required to pay payroll tax. If your business is not based in Queensland you need to review the threshold for your state as all states have a different threshold.

If however, you employ staff who reside in a different state, and the total wage expense for all employees exceeds the threshold for either state, then there will be a payroll tax obligation in both states, even if neither state threshold is individually exceeded.

For example, if your wages expense for your Queensland employees totals $600,000 for the year, and you have employees who reside in New South Wales and their wages total $600,000, your total Australian wages expense is $1,200,000. Even though neither the Queensland nor the New South Wages wage thresholds are exceeded individually, the amalgamation of wages does exceed both thresholds. In this instance, registration for payroll tax would need to be obtained in both Queensland and New South Wales and monthly returns lodged in both states.

If your wages are over this limit please contact us and we can review your situation to determine if you have a liability.