Payroll tax is a state tax. It's assessed on the gross wages paid or payable to employees, including directors and contractors, by an employer (or group of employers) whose total Australian taxable wages exceed the threshold amount.

Each state and territory has its own payroll tax legislation, with different rates and thresholds.

Liability for payroll tax

If you're an employer who pays wages in NSW, you must register for payroll tax if your total Australian wages exceed the relevant monthly threshold.

The definition of ‘gross wages’ is any remuneration paid or payable by an employer to an employee for services provided before taxes and deductions are taken off. For details on what is defined as wages, refer to our Wages page and Checklist of liable and exempt wage items.

If you're a member of a group, the total Australian wages paid by all members of the group are combined to determine whether you should register for payroll tax.

Read more about how to determine if you are part of a group on our grouping page.

Rates and thresholds

The current payroll tax rate is 5.45%. To see rates and thresholds for previous years, read the rates and thresholds page.