Payroll Tax Calculator Australia

What this payroll tax calculator does

This payroll tax calculator estimates the annual payroll tax an Australian employer owes in a chosen state or territory. Enter your wage bill, pick the jurisdiction, and it returns the tax payable, the threshold you can actually claim, the rate applied, the monthly instalment and the effective rate across your whole payroll.

Payroll tax is the tax most often misjudged by growing businesses. It has no relationship to profit, it arrives the moment a wage bill crosses a line, and the line differs in every jurisdiction. A business can be losing money and still owe tens of thousands of dollars in payroll tax.

How the tax is structured

Every state and territory works the same way in outline. You add up the Australian wages you pay, you subtract a threshold, and you pay a percentage of the rest.

The differences are in the numbers. The threshold varies from under a million dollars to two million, and the rate from four per cent to nearly seven. The result is that identical businesses in two states can face materially different payroll tax bills, which matters when you are deciding where to put a new office or a new team.

The tax is annual but paid monthly for most employers, with a reconciliation at the end of the financial year. The monthly figure in the results is your rough instalment.

What counts as wages

The wages base is much wider than the salary line in your accounts. It includes:

• salaries, wages, casual pay, overtime and penalty rates
• bonuses, commissions and most allowances
• directors fees and payments to office holders
• employer superannuation contributions of every kind
• the grossed-up taxable value of fringe benefits
• shares and options issued to employees
• payments to contractors under relevant contracts, unless an exemption applies

Superannuation catches people out most often. Because it is taxable wages in every jurisdiction, adding super to a wage bill can push an employer over the threshold even when their cash payroll is comfortably under it. The calculator adds the super guarantee to your wages by default for exactly that reason; untick the estimate and enter your actual contributions if you know them.

Contractor payments are the second trap. A contractor who works predominantly for you, supplies mainly labour, and does not service the wider market may be deemed an employee for payroll tax purposes even where they hold an ABN and issue tax invoices. The exemptions are technical, so only enter amounts you have already tested against them.

Thresholds, deductions and interstate wages

The threshold belongs to the employer, not to each employee, and it does not multiply when you operate in several states.

If you pay wages in more than one jurisdiction, each state gives you only the fraction of its threshold that matches the share of your Australian wages paid there. An employer paying sixty per cent of its wages in one state claims sixty per cent of that state's threshold. Enter your interstate wages and the calculator applies that apportionment for you.

Several jurisdictions also reduce the deduction as the payroll grows rather than granting it in full up to a cliff edge. In South Australia the deduction phases out over a narrow band above the threshold. In Western Australia and the Northern Territory it diminishes in a straight line up to a much higher wage level, reaching zero for large employers. The tool reads those phase-out points from the same parameter as the thresholds and applies the taper.

Regional rates and surcharges

Not every employer in a state pays the headline rate.

Victoria charges a substantially reduced rate to regional employers on wages paid to regional employees, which is one of the largest concessions in the system. Tick the regional option if that applies to you.

At the other end, very large payrolls attract extra impositions. Victoria applies a mental health and wellbeing surcharge above a high wage level, with a further step for the largest employers. Queensland applies a mental health levy on a similar structure and a higher headline rate once the payroll passes a set point. Tasmania and Western Australia also have higher tiers for large employers. Enter those as the surcharge percentage so they are added to the rate applied.

Reading the result

The headline output is the annual payroll tax payable. Below it you can see exactly how it was built: your taxable wages after super and other inclusions, the threshold you could claim after apportionment and any taper, and the wages that were actually taxed.

Two figures are worth particular attention. The effective rate spreads the tax across your entire wage bill, and it is always lower than the headline rate because the threshold is untaxed. It is the number to use when you are costing wages as a percentage. The payroll tax on the next hundred thousand dollars of wages is the marginal figure, and it is the one that matters when you are deciding whether to hire. Once you are above the threshold, that marginal cost applies to every extra dollar, including the super on it.

If your wages sit under the threshold, the tool reports the headroom you have left before payroll tax starts.

Before you rely on the number

Grouping provisions are the most common reason a real assessment differs from an estimate. Related entities, common ownership, common employees, tracing of interests, are grouped and share one threshold between them, and the group is jointly liable. A company that appears well under the threshold on its own can have no threshold at all once grouped.

Exemptions also change the picture: wages paid to apprentices and trainees, some charitable and public benevolent institution wages, parental leave and volunteer service pay are treated differently in different jurisdictions.

This calculator produces an estimate from the published thresholds and rates and is not tax advice. Registration deadlines, grouping, contractor deeming and exemption tests all need to be confirmed with your accountant or the revenue office in your state.

About This Payroll Tax Calculator

Use this payroll tax calculator to get an instant, accurate estimate. The figures follow official ATO guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.