Payroll Tax Western Australia

This is general information and not advice. For more information see WA Department of Finance.

WA State Budget 2022-23

[12 May 2022] Payroll tax measures announced in the 2022 WA State Budget include:

The annual payroll tax liability threshold enabling quarterly payments (instead of standard monthly) increased from $100,000 to $150,000 with effect from 1 July 2022. (Payers of less than $20,000 annually can still choose to pay annually.)
As announced in April 2022 (see below) hospitality businesses with payrolls of $4 million to $20 million may qualify for a 3 month waiver, subject to demonstrating a 40% drop in turnover in the period of January to April 2022 (compared to 2021).

See full details set out in Budget Paper No. 3 (Various revenue measures are summarised from page 68).

Payroll Tax Rate in Western Australia

The payroll tax rates starts at 5.5% on payrolls over $1 million. The rate increases on higher values as set out in the following table.

Deductible amount for payrolls between $1 million and $7.5 million

Taxable payrolls between $1 million and $7.5 million have a deductible amount of $1 million, which reduces by $2 for every $13 of wages over the threshold of $1 million.

Taxable Annual W.A. Wages	Tax Rate
Over $1 million and less than $7.5 million	5.5% (tapering deductible)
$7.5 million to $100 million	5.5% (no deductible)
Over $100 million and less than $1.5 billion	5.5% up to $100 million plus 6% on $100m to $1.5bn
More than $1.5 billion	5.5% up to $100 million plus 6% on $100m to $1.5bn plus 6.5% above $1.5bn

Source: WA Dept of Finance

Payroll Tax Threshold in Western Australia

The annual threshold is $1 million, applicable from 1 July 2020. Registration is required if taxable Australian wages reach at least $83,333 in any month.

According to a tapering formula, the threshold deductible amount of $1 million reduces by $2 for every $13 of wages over the threshold.

WA Payroll Tax Exemptions

Exempt wages and organisations are listed here:

Apply for a payroll tax exemption

WA Payroll Tax Due Dates

Monthly returns are due and payable by the 7th of the following month in which the taxable wages were paid or payable. The June return is due and payable by 21 July.
Quarterly returns are due and payable by 7th October, January and April and 21 July.
Annual returns are due and payable by 21 July.

What Are Taxable 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 (including certain salary sacrifice amounts) as defined under the Fringe Benefits Tax Assessment Act 1986.

See: Taxable wages: Payroll Tax Employer Guide

Payroll Tax And Contractors

Payments to contractors are taxable if an arrangement “akin to an employee/employer relationship” exists.

Western Australia is not harmonised with other states and territories in this regard.

For guidance see:

Grouping provisions

Entities are grouped for payroll tax 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 the following factors:

Related companies according to the Corporations Act definition
Use of common employees
Common control (more than 50%) from one or more persons
“tracing” – an entity has a direct, indirect or aggregate controlling interest in a corporation

See Grouping: Payroll Tax Employer Guide

WA Payroll Tax Registration

Registration for payroll tax is required within seven days after the month in which your total Australian wages first exceed the current WA monthly or annual threshold amount.

This page was last modified 2024-04-23