The NSW Government has announced a reduction in the payroll tax rate to 4.85 per cent for the 2020/21 and 2021/22 financial years.
The threshold has also increased to $1,200,000 for the 2020/21 and subsequent financial years.
These changes apply retrospectively from 1 July 2020. For more information about these changes, please see our frequently asked questions.
|Tax year||Threshold||Tax rate|
|01/07/2020 to 30/06/2021||$1,200,000||4.85%|
|01/07/2019 to 30/06/2020||$900,000||5.45%|
|01/07/2018 to 30/06/2019||$850,000||5.45%|
|01/07/2017 to 30/06/2018||$750,000||5.45%|
|01/07/2016 to 30/06/2017||$750,000||5.45%|
The monthly threshold amounts are:
|Days in the month||Threshold|
Several factors determine whether you get the full threshold entitlement.
If you start or stop employing in NSW within a financial year you’re not entitled to the full threshold. You’ll receive a proportion of the threshold equal to the number of days you employ to the number of days in a year.
If you pay wages in another Australian state or territory, the threshold is calculated as a proportion equal to the ratio of NSW wages to total Australian wages. For example, if 80 per cent of your total wages are paid in NSW, you’re entitled to 80 per cent of the threshold.
If your business is part of a group of businesses, only one threshold applies to the whole group.
For more information, read the grouping page.
A motor vehicle allowance is paid to an employee to compensate them for any business use of their own private vehicle.
The motor vehicle allowance is only subject to payroll tax if it exceeds the exempt rate.
|Period||Allowance per km|
|01/07/2020 to 30/06/2021||$0.68|
|01/07/2019 to 30/06/2020||$0.68|
|01/07/2018 to 30/06/2019||$0.66|
|01/07/2017 to 30/06/2018||$0.66|
|01/07/2016 to 30/06/2017||$0.66|
The exempt rate per km used for payroll tax is the ATO prescribed rate for the financial year immediately before the financial year in which the allowance is paid.
For more information on calculating the motor vehicle allowance, read the allowances page.
For real estate salespersons, read Revenue Ruling PTA 025v2.
An overnight accommodation allowance is paid when an employee spends a night away from their usual place of residence because of work.
The overnight accommodation allowance is only subject to payroll tax if it exceeds the exempt rate:
|Period||Allowance per night|
|01/07/2020 to 30/06/2021||$283.45|
|01/07/2019 to 30/06/2020||$280.75|
|01/07/2018 to 30/06/2019||$278.05|
|01/07/2017 to 30/06/2018||$266.70|
|01/07/2016 to 30/06/2017||$257.95|
For more information on calculating the overnight accommodation, read the allowances page.
For truck drivers, read Revenue Ruling PTA 024v2.
The value of the benefits used for payroll tax is the total of the type 1 and type 2 aggregate amounts multiplied by the type 2 gross-up rate but does not include tax exempt body entertainment fringe benefits.
The gross-up rates are:
|01/07/2020 to 30/06/2021||1.8868|
|01/07/2019 to 30/06/2020||1.8868|
|01/07/2018 to 30/06/2019||1.8868|
|01/07/2017 to 30/06/2018||1.8868|
|01/07/2016 to 30/06/2017||1.8868|
For more information, read the fringe benefits page.