$1.2m threshold, 5.45% Revenue NSW
Payroll Tax — New South Wales
Payroll tax in NSW is charged at 5.45% on wages above an annual tax-free threshold of $1,200,000.
| What | NSW |
|---|---|
| Annual threshold | $1,200,000 |
| Rate | 5.45% |
| Paid to | Revenue NSW |
What you need to know
- The annual tax-free threshold is $1,200,000.
- The rate is 5.45%, charged only on wages above the threshold — not on all wages.
- A monthly threshold applies for the 2026-27 financial year, so employers lodge and pay monthly rather than waiting for an annual bill.
- Whether you can claim the full annual threshold depends on your circumstances — if you employ for part of a year, or you are in a group, the threshold is apportioned.
Why payroll tax surprises businesses
Payroll tax is a state tax on wages, and it is the tax most likely to catch a growing business by surprise for three reasons:
- The threshold is tested on Australia-wide wages, not just wages paid in that state. A business with staff in three states counts all of them.
- Groups share one threshold. Related entities are treated as one employer, so they do not each get their own tax-free amount.
- Registration and liability are separate. In several states you must register even when your wages are under the threshold and you owe nothing.
Frequently asked questions
What is the payroll tax threshold in NSW?
$1,200,000 a year, with tax at 5.45% applied only to wages above it.
Is the tax on all wages or just the excess?
Just the excess. Payroll tax is a marginal tax on wages above the threshold — a business paying $1,300,000 is taxed on $100,000, not on the full amount.
Is there a monthly threshold?
Yes — a monthly threshold applies for the 2026-27 financial year, which is why most employers lodge monthly returns.
Does the threshold apply to a group of businesses?
No — a group of related employers shares one threshold between them, based on the group's combined wages. That is the single most common way businesses accidentally underpay.
Compare the other states
| State | Threshold | Rate |
|---|---|---|
| New South Wales | $1,200,000 | 5.45% |
| Victoria | $1,000,000 | 4.85% |
| Queensland | $1,300,000 | 4.75% |
| Western Australia | $1,000,000 | 5.5% |
| Tasmania | $1,250,000 | 4% / 6.1% |
| Northern Territory | $2,500,000 | 5.5% / 6.5% |
Related
- Land tax calculator — the state tax on property instead of wages
- Company tax rates
- Take-home pay calculator
- Centrelink payment rates
From Revenue NSW, checked 12 October 2026. General information only — not tax advice.