Payroll Tax Tasmania

This is general information and not advice. For more information go to the Tasmanian State Revenue Office.

COVID-19 (Coronavirus) Relief Measures

The Tasmanian Government has provided stimulus measures for the hospitality tourism, seafood and exports sectors and payroll relief for eligible businesses for the year 2019-20.

See:

Payroll Tax Rate in Tasmania

The current 2020-21 and 2021-22 payroll tax rates are set by reference to levels above the tax-free threshold of $1,250,000.

Annual Wages	Payroll Tax Rate
0 to $1,250,000	0
$1,250,001 to $2,000,000	4%
$2,000,001 and above	6.1%

Monthly thresholds are calculated by reference to the number of days in the month as a proportion of the days in the year.

Calculations and rates for earlier years are set out here.

Payroll Tax Threshold in Tasmania

The payroll tax annual tax-free threshold since 1 July 2013 has been $1,250,000 (increased from $1.01 million).

Each monthly threshold is calculated by dividing the number of days in the month by days in the year multiplied by the annual threshold.

e.g. threshold for June 2018 is: 30 ÷ 365 x $1.25 million = $102,740

In the annual reconciliation this amount is deducted from annual Australian wages to determine the actual payroll tax liability for the year. The calculated liability is then compared to the total of monthly returns, resulting in either a balance to pay, or a refund due.

For historical rates and thresholds see here.

Tasmania Payroll Tax Due dates

Monthly returns and payment are due seven days after the end of each month, except for the June return
An annual adjustment return (AAR) and reconciliation is required by 21 July each year, which includes the June return

Tasmania Payroll Tax Wages

Taxable wages for payroll tax purposes includes not only wages/salaries, but also employer superannuation contributions, commissions, bonuses, allowances, directors’ fees, fringe benefits, the taxable component of termination payments and payments to relevant contractors.

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.

See in detail: What are taxable wages? and a taxable items checklist

Tasmania Payroll Tax Exemptions

The payroll tax exemption application form lists exemption categories which are also listed in the employer’s guide.

An Employment Incentive Scheme (Payroll Tax Rebate) provides employers with Payroll Tax rebates for youth employees and apprentices and trainees under a scheme in place initially until 30 June 2023.

The rebate applies for 2 years from the date that apprentices and trainees are employed and one year from the date that youth employees are employed.

Tasmanian Payroll Tax on Allowances

Generally, all allowances are taxable for payroll tax purposes but motor vehicle and overnight accommodation allowances are not unless they exceed the exempt component. The exempt rates for motor vehicle and accommodation allowances are based on the fringe benefits tax position. See in detail Allowances and reimbursements

Tasmania Payroll Tax and Contractors

The definition of wages for payroll tax purposes includes payments contractors who provide predominantly labour, and who mainly work for one person. The contractor provisions can apply whether or not the services are provided through another entity such as a company or trust, and deemed wage amounts exclude any GST component.

Contractor payments is a complex area, and there are anti-avoidance provisions. Professional advice is strongly recommended.

See in detail: Contractors

Tasmania Payroll Tax and Employment Agencies

An employment agency arrangement typically involves:

the service provider contracting with the employment agent, and
the employment agent contracting with the client.

The relevant contractor provisions are not applicable where a contract worker is provided
under an employment agency contract. Consequently a payroll tax liability remains with the agency.

See in detail: Employment Agency Provisions

Tasmania Payroll Tax Grouping Provisions

Payroll values of grouped entities are added together for taxing purposes so that the deductible threshold is only available once within groups of related parties. Relationships (and hence aggregation of payroll amounts) are determined on the basis of :

Related companies according to the Corporations Act definition
Use of common employees
Common control by one or more persons
Tracing of aggregate controlling interests

There are grouping exclusions available on the exercise of the Commissioner’s discretion.

See in detail: Grouping Provisions

Tasmania Payroll Tax Registration

Electronic registration and payment of payroll tax is required by the 7th day of the month following the month in which wages exceed the deduction threshold level.

Further information

Tasmania SRO Payroll Tax

This page was last edited 2021-06-25