$1m threshold, 5.5% — diminishing RevenueWA
Payroll Tax — Western Australia
WA charges 5.5%, but its threshold is the interesting part: it diminishes, phasing out entirely between $1 million and $7.5 million of wages.
| What | WA |
|---|---|
| Annual threshold | $1,000,000 |
| Rate | 5.5% |
| Paid to | RevenueWA |
What you need to know
- Rate: 5.5% on taxable wages.
- Annual threshold: $1,000,000.
- The threshold is diminishing — it phases out gradually for employers with Australian taxable wages between $1 million and an upper threshold of $7.5 million.
- Above $7.5 million, there is no threshold left at all: the full 5.5% applies to all taxable wages.
- The threshold can be apportioned if you do not pay wages for a whole financial year, or if you join or leave a group.
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 WA?
5.5%, above a threshold of $1,000,000.
What does diminishing threshold mean?
The tax-free amount does not stop at $1,000,000 — it reduces as wages rise, and disappears altogether at $7,500,000. So a business on $3 million of wages does not get a full $1 million threshold, and a business on $7.5 million gets none.
Why is that different from other states?
Most states use a fixed threshold and a phase-out rate, which achieves a similar effect. WA achieves it by shrinking the threshold itself, which is harder to model by hand — use RevenueWA's own calculator for a precise figure.
Does the threshold apply per business or per group?
Per group. A group of related employers shares the threshold on their combined Australian taxable wages, and the threshold is apportioned when members join or leave.
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 RevenueWA, checked 12 October 2026. General information only — not tax advice.