Update 11 June 2019 Qld State Budget 2019-20: the following payroll tax measures were announced taking effect from 1 July 2019:
- the standard payroll tax rates remains at 4.75%, but the rate for larger employers (annual payroll over $6.5 million) is increased by 0.2% to 4.95%
- the annual payroll exemption threshold will be increased to $1.3 million (up from $1.1 million) for all employers
- regional employers payroll tax rate will be lower by 1%:
- medium businesses – up to $6.5 million – payroll tax rate 3.75%
- over $6.5 million – payroll tax rate 3.95%
- businesses hiring new employees (i.e. employers with a net growth in total full-time employees over a year) will qualify for a temporary 100% rebate of up to $20,000
- the 50% payroll tax rebate on the wages of apprentices and trainees will be extended by a further 2 years to 30 June 2021
Regional businesses are those with a registered business address in regional areas and where 85% of taxable wages are paid to employees who reside in regional Queensland Regional Queensland will include Cairns, Central Queensland, Darling Downs–Maranoa, Mackay–Isaac–Whitsunday, Queensland–Outback, Townsville and Wide Bay.
Update 12 June 2018: Qld State Budget 2018-19: the payroll tax rebate for the wages paid to apprentices and trainees at the increased rate of 50% will be further extended for another year until 30 June 2019.
Further information see Qld Budget 2018-19
Update 14 July 2016: Qld State Budget 2016-17: There were no fresh adjustments to the payroll tax thresholds and rate in the 2016-17 budget announcements.
Update 14 July 2015: Qld State Budget 2015-16: Payroll tax measures announced in the budget include a further deferral of the taxable threshold which was to have been increased on 1 July 2015. The threshold will remain at $1.1 million going forward.
The budget measures at a glance:
- the deferral of scheduled annual increases of $100,000 in the payroll tax threshold on 1 July of each year from 2015 to 2019. (The threshold would have reached $1.6 million on 1 July 2019). The threshold will remain at $1.1 million.
- a three year payroll tax exemption for new companies established in Queensland as part of Advance Queensland research programs.
- from 1 July 2015, a payroll tax rebate of 25% on the wages of apprentices and trainees in addition to their wages being exempt from payroll tax up to 30 June 2018. The rebate will be used as an offset against payroll tax payable on the wages of other employees.
News 5 September 2014: Treasurer Tim Nicholls has announced that from 2015 Queensland businesses with an annual payroll tax liability of less than $20,000 will only need to lodge payroll tax returns twice a year, instead of every month. For more, see media release
Update 3 June 2014: Qld State Budget 2014-15: There were no payroll tax announcements in the current budget.
Update 4 June 2013: Qld State Budget 2013-14: The Government’s commitment to increase in the payroll tax threshold to $1.2 million, which had been intended to take effect from 1 July 2013, will now be deferred until 1 July 2015.
Payroll Tax Rate in Queensland
– the payroll tax rate is 4.75% of taxable wages to 30 June 2019.
Budget 2019-20 proposals from 1 July 2019 provide for differential rates:
- Payrolls up to $6.5 million: 4.75% (i.e. unchanged)
- Payrolls over $6.5 million: 4.95% ( an increase of 0.2%)
- Regional business payrolls up to $6.5 million – 3.75%
- Regional business payrolls over $6.5 million – 3.95%
Payroll Tax Threshold in Queensland
The payroll tax annual exemption threshold (applied as a deduction) from 2013-14 financial years is $1.1 million. The 2019-20 Budget provides that this threshold will increase to $1.3 million from 1 July 2019. See further (and for prior year information): thresholds
Deductions for payrolls in excess of the threshold exempt amount are reduced by 25% ($1 in $4) of the excess. See deduction calculations.
The annual return is used to determine the actual payroll tax liability for the year. This calculated liability is then compared to the total of monthly returns, resulting in either a balance to pay, or a refund due.
- Monthly returns and payment are due seven days after the end of each month except June, or if a weekend or public holiday, the next business day.
- An annual return and reconciliation is required by 21 July each year
Definition of wages
The payroll tax base include wages and salaries, the definition of which is expanded to include a range of contractor payments, allowances and fringe benefits as they are defined under the Fringe Benefits Tax Assessment Act 1986.
Included are payments to third parties for services provided by and employee (or director) to an employer.
Qld payroll tax exemptions
There are also a number of exemptions and exclusions. Exemptions may be based on the status of the employer, or the nature of the work.
Payroll tax and contractors
The taxability of contractor payments is a complex area – and subject to some confusion in practice. “Relevant contracts” are taxable, subject to exemptions and anti-avoidance provisions described here.
Entities which are grouped for payroll tax purposes only have one deductible threshold.
Relationships (and hence aggregation of payroll amounts) are determined on the basis of 5 possible factors:
- are related bodies corporate
- share employees
- are controlled by the same person(s)
- are corporations with indirect links or complex structures
- are part of 2 or more groups.
There are some group exemptions available.
There is more detailed information here about groups, and how to apply for an exclusion.
Registration for payroll tax is required within seven days after the month in which your total Australian wages first exceed the current Queensland monthly threshold. For registration tools see here.
For further detailed information, please see the schedule of OSR Queensland Payroll Tax Revenue Rulings
This page was last modified 2020-03-17