Payroll Tax Western Australia

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

Western Australia State Budget 2026

In the Western Australian State Budget announced 7 May 2026 the payroll tax settings have not changed.

• 2026-27 Budget Papers | Western Australia State Budget
• BDO response to the Western Australian State Budget 2026-27 – BDO

Payroll Tax Rate in Western Australia

The payroll tax rate is currently 5.5%.

Tax applies on payrolls over the deductable amount.

The deductable amount applies to taxable wages in Australia between $1 million and $7.5 million and is reduced by $2 for every $13 over the threshold.

Example calculation: For annual wages of $1,200,000, the deductable amount would be $1,000,000 – [($1,200,000 – $1,000,000) X (2/13)] = $969,231. (Source: wa.gov.au)

Payroll Tax From 1 July 2023

Annual Australian taxable wages	Tax rate	Tax Calculation
More than $1 million but less than $7.5 million	5.5%	WA taxable wages – tapered deductable amount x tax rate
$7.5 million or more	5.5%	WA taxable wages x tax rate (no deductable)

Payroll Tax 1 July 2020 to 30 June 2023

Taxable Annual W.A. Wages	Tax Rate (up to 30 June 2023)
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

Sources: 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.

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:

• Contractor payments: Payroll Tax Employer Guide
• Contractor payments questionnaire

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.

• There is more registration information here.
• Payroll Tax Calculator
• Registration is online here.

This page was last modified 2026-05-08