Payroll Tax Western Australia
This is general information and not advice. For more information see WA Department of Finance.
WA State Budget 2024 for 2024-25
The State Budget announced on 9 May 2024 contained no new payroll tax measures.
See: Budget Paper No. 3
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:
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 2024-05-09