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Payroll tax thresholds and tax rate for New South Wales.
On this page
Payroll tax threshold and tax rate
Tax year
Threshold
Tax rate
01/07/2023 to 30/06/2024
$1,200,000
5.45%
01/07/2022 to 30/06/2023
$1,200,000
5.45%
01/07/2021 to 30/06/2022
$1,200,000
4.85%
01/07/2020 to 30/06/2021
$1,200,000
4.85%
01/07/2019 to 30/06/2020
$900,000
5.45%
Monthly threshold amounts
Days in the month
Threshold
29
$95,082
30
$98,361
31
$101,639
Threshold entitlement
Several factors determine whether you get the full threshold entitlement.
Wages are only paid for part of the year
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.
For example, an employer only paid wages from 1 July to 31 December in a financial year and ceased to employ as of 31 December. As they only employed for 184 days in the financial year, they would only receive 50 per cent (184 / 365 or 366) of the yearly threshold.
A business pays taxable wages in another state or territory
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'll only receive 80 per cent of the threshold.
If an employer pays wages for only part of the financial year and pays taxable wages in another state or territory, their wages will be further reduced.
For example, if an employer only paid wages from 1 July to 31 December they would receive only 50 per cent of the yearly threshold. This would be further reduced if 80 per cent of their total wages are paid in NSW. In this situation the employer would only receive 40 per cent (50 per cent X 80 per cent) of the yearly threshold.
A business is part of a group
If your business is part of a group of businesses, only one threshold applies to the whole group. You will also need to include the taxable wages of your other group members in your returns.
For grouped employers claiming a threshold, the threshold is calculated as a proportion equal to the ratio of total group NSW wages to total group Australian wages.
For example, if an employer only pays taxable wages in NSW and is grouped with another employer only paying taxable wages in Victoria, both employers wages will need to be declared in returns to calculate the total group Australian wages. If 80 per cent of the group’s total wages are NSW, then the employer claiming the group’s threshold will only receive 80 per cent of the threshold.
For more information on payroll tax grouping, read the grouping page.
Monthly calculation examples for the 2023-24 financial year
The payroll tax rate is 5.45 per cent and the threshold is $1.2 million.
Your monthly threshold is calculated using the number of days in the month, divided by the number of days in the year, multiplied by the threshold. Open the headings below to read the examples.
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
01/07/2023 to 30/06/2024
$0.78
01/07/2022 to 30/06/2023
$0.72
01/07/2021 to 30/06/2022
$0.72
01/07/2020 to 30/06/2021
$0.68
01/07/2019 to 30/06/2020
$0.68
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.
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.