Payroll tax is a state and territory tax paid by employers.
It is assessed on the gross Australian wages paid or payable to employees by an employer or group of employers.
Gross wages are any remuneration paid or payable by an employer to an employee for services provided before taxes and deductions are applied.
Payroll tax helps fund a range of essential services managed by the NSW State Government including health care, public transport, policing and infrastructure projects.
Employers must pay payroll tax when their total Australian taxable wages are more than an amount called the annual payroll tax threshold.
The annual tax-free threshold for New South Wales (NSW) is currently $1,200,000.
The amount of tax payable is calculated only on wages that exceed the threshold amount in a financial year. The current payroll tax rate in NSW is 5.45%.
Read the thresholds and rates page for more details.
Some organisations may be eligible for an exemption from payroll tax. These organisations include religious institutions and non-profits. Read employers exempt from payroll tax for more details.
Some employers must pay their payroll tax monthly. Others only pay annually.
Payment frequency depends on an employer’s annual payroll tax liability in NSW. If it is more than $20,000 an employer must pay monthly.
Monthly payroll tax is due 7 days after the end of each month, or the next business day if the 7 th day is on a weekend or public holiday.
Annual payroll tax is due 28 July each year, or the next business day if 28 July is on a weekend or public holiday.
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If employers do not pay their payroll tax by the due date interest is applied to the outstanding amount. They may also be liable for penalty tax. Read the interest and penalty tax page for more details.
Read what happens if you do not pay your payroll tax to understand how we help employers meet their obligation to pay on time.
Some wages, such as parental leave, are exempt from payroll tax.
Rebates are available for certain apprenticeships and traineeships recognised by Training Services NSW. Read the apprentice and trainee wages page for more details.
Employers who pay wages in NSW must register for payroll tax with Revenue NSW when their total monthly Australian wages are more than an amount called the monthly payroll tax threshold.
Read the thresholds and rates page for the current monthly thresholds.
Employers that are part of a group must register as a grouped employer if the total Australian wages of all businesses in the group are more than the monthly threshold during any month.
There are different ways employers may be grouped for payroll tax. Read the grouping section for more details.
Read register for payroll tax for instructions on how to register, including the information employers need to provide.
All registered employers must lodge an annual return at the end of each financial year, even if it is a nil return.
Revenue NSW is responsible for collecting payroll tax in NSW in accordance with the Payroll Tax Act 2007 (PTA).
Payroll tax is administered by revenue offices in each individual state or territory. Since 2007 states and territories have harmonised several key areas of payroll tax administration. Read more about payroll tax harmonisation.
Although the laws are mostly harmonised, each Australian state and territory has different taxable wages, rates, and thresholds.
Nexus provisions in the PTA determine in which state or territory payroll tax is to be paid when employees work in multiple jurisdictions. Read the nexus provisions page for more details. Nexus provisions aim to prevent double taxing (i.e. charging tax in more than one jurisdiction).
In addition to legislation, Revenue NSW and other revenue offices produce documents that help explain payroll tax laws.
Revenue Rulings clarify our interpretation of the law, especially when the law is unclear or complex.
Commissioner’s Practice Notes contain information and guidance to make it easier to comply with the legislation.
Case Summaries developed by the NSW Crown Solicitor's Office outline judgements made in cases against the Chief Commissioner of State Revenue.
Learn how to avoid common errors made by employers new to payroll tax.
Learn how business growth can lead to errors in payroll tax returns by reading the payroll tax and growing businesses page.
Use payroll tax assist to help you meet your payroll tax obligations. It will show you what wages are taxable, including salaries, superannuation, contractors, apprentices and much more.
Certain industries, such as cleaning, the gig economy and real estate, have unique payroll tax issues. The industry specific guidance section contains tailored payroll tax information for these industries.
Visit Payroll Tax Australia for general information about payroll tax, including revenue offices in other jurisdictions, and watch their video below.
If you have questions about this topic call 1300 139 815 or +61 2 7808 6904 for international callers.