$1m threshold, 4.85% State Revenue Office Victoria
Payroll Tax — Victoria
Victoria charges 4.85% above a $1,000,000 annual threshold — with a lower rate of 1.2125% for regional Victorian employers.
| What | VIC |
|---|---|
| Annual threshold | $1,000,000 |
| Rate | 4.85% |
| Paid to | State Revenue Office Victoria |
What you need to know
- Annual tax-free threshold: $1,000,000. Monthly threshold: $83,333.
- Standard rate: 4.85%.
- Regional Victorian employers pay 1.2125% — a lower rate, not a discount off the standard one.
- The threshold phases out above a certain wages level, so a business just over the line does not simply pay 4.85% on the excess — the threshold itself starts to reduce.
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 rate in Victoria?
4.85%, above an annual threshold of $1,000,000. Regional Victorian employers pay 1.2125%.
What is the monthly threshold?
$83,333 a month.
Why do some businesses pay more than they expect?
Because Victoria has a phase-out rate: the tax-free threshold itself reduces once wages pass a certain level, so the effective cost of going over is higher than the headline rate suggests.
Is the regional rate automatic?
No — it applies to regional Victorian employers and you have to be eligible for it. It is a genuinely lower rate (1.2125%), not a rebate of the standard rate.
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 State Revenue Office Victoria, checked 12 October 2026. General information only — not tax advice.