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Only one member of a payroll tax group can claim the tax-free threshold. The threshold can be claimed either as the:
Designated Group Employer (DGE), or
Group Single Lodger (GSL).
A GSL group is mandatory if none of the group members by themselves pay gross taxable wages that exceed the monthly threshold.
It is important to determine a group’s total Australian wages because it will affect the threshold that the group is entitled to claim in NSW and in other states/territories.
When group members have interstate wages, the group’s tax-free threshold will be reduced, using the proportion of total Australian wages that consist of NSW wages.
For example, if total NSW wages represent 50% of total Australian wages, the NSW threshold is reduced to 50% of the full monthly and annual thresholds. Read the interstate wages page for more details on how to calculate your threshold.
Open the headings below to read more about grouping and threshold entitlement.
In a DGE group, only one member can claim the tax-free threshold. The DGE member must pay wages that exceed the threshold amount on its own.
The other group members become Non Threshold Claimers (NTC). NTC members:
do not receive the benefit of the threshold, and
are taxed at the full payroll tax rate of 5.45% on their total taxable wages.
All members of the group lodge returns.
If your business operates/employs in NSW, and is grouped with another business that operates solely in states outside NSW (with a different ABN), you must lodge as a DGE and report the grouped entities wages as interstate only group member(s).
Where the group employs in other states/territories, the DGE does not need to be the same in each state/territory. For more details on payroll tax grouping in other jurisdictions, contact the revenue office in the relevant state/territory or visit their website.
If you are a Non-Threshold Claiming member in a group with a DGE, you will not receive the benefit of a tax-free threshold. Your total taxable wages will be subject to the full payroll tax rate of 5.45%, meaning you will pay at a flat rate.
One member of the group becomes the Group Single Lodger and is responsible for lodging the payroll tax return on behalf of the entire group. The member is also the only one eligible to claim the tax-free threshold.
Other group members, known as Non-lodging members, do not lodge returns, but must still be registered for Payroll tax if they pay wages in NSW.
The GSL must include the total gross Australian wages of all group members in its return.
A Non-Lodging member is required to register for NSW Payroll tax if they employ in NSW, but they do not lodge returns themselves. Their wages will be included in the return lodged by the GSL.
A Non-grouped entity is a business that is not grouped with any other business that employs in Australia and is required to lodge as non grouped. Non-grouped entities are entitled to the full NSW threshold (unless employing interstate, then the threshold will be apportioned).
Calculating group liability
From 1 July 2024 the payroll tax rate and threshold are 5.45% and $1,200,000.
Lodging as a DGE or GSL does not affect the total group liability.
The tables below show the calculations for DGEs and GSLs.
Example
Business
NSW wages
Interstate wages
Business 1
$500,000
$800,000
Business 2
$100,000
$600,000
Business
DGE
GSL
Calculate threshold: (Group NSW wages ÷ Group Australian wages) x NSW threshold
[($500,000 + $100,000) ÷ $2,000,000] x $1,200,000 = $360,000
[($500,000 + $100,000) ÷ $2,000,000] x $1,200,000 = $360,000
Tax payable for Business 1
($500,000 - $360,000) x 5.45% = $7,630
($600,000 - $360,000) x 5.45% = $13,080
Tax payable for Business 2
$100,000 x 5.45% = $5,450
nil
Total group liability
$13,080
$13,080
Can my business be excluded from a group?
A business that is grouped with other businesses for payroll tax may apply to Revenue NSW to be excluded from the group in certain circumstances.
Businesses grouped as related corporations under the Corporations Act 2001 cannot apply for an exclusion from the group.
