Payroll tax is a state and territory tax based on the wages you pay your employees. The rates and thresholds for payroll tax vary depending on where your business operates.
In New South Wales (NSW), your business needs to register for payroll tax if it exceeds the threshold in wages paid. Currently, the threshold is $1.2 million per year (as of 12 April 2024). If your business exceeds this threshold, you must register for payroll tax.
The payroll tax in New South Wales (NSW) goes to cover social welfare systems, such as healthcare and education. Though the tax rate is set by the state or territory it is paid to a federal fund. In NSW, the Payroll Tax Act 2007 No 21 sets the rules. It means that the payroll tax in NSW varies from other states such as Queensland and Australian Capital Territory.
The NSW payroll tax rate is to 5.45% for the 2023-2024 financial year. If you are an employer and you pay wages in NSW, and those wages exceed the monthly threshold, you need to register for payroll tax.
If you are a member of a group, members of the group hold payroll tax liability if one member of the group's wages paid exceeds the threshold.
|
Rate |
Monthly Threshold |
Annual Threshold |
|||
|
5.45 |
$92,055 (28 days in the month)
|
$1,200,000 |
*The rate up to 30 June 2022 is 4.85% and 5.45% from 1 July 2022.
Monthly payments or nil returns must be submitted within 7 days following the end of each month. In the event that the seventh day falls on a weekend or public holiday, the deadline will be postponed to the following business day.
The annual reconciliation is usually required to be submitted by 28 July of each year. In case the 28th falls on a weekend or public holiday, the due date is postponed to the next business day.
If you exceed the threshold in a single month of the year, you need to register for payroll tax. If you are a member of a group and only one member exceeds the threshold, everyone in the group must register for payroll tax.
You can easily register for payroll tax using the online form. All you need on hand is your Australian Business Number (ABN), address and contact details, and payroll tax-specific details. If you do not have an ABN, but the ASIC issued you with an ARBN, you need to contact Revenue NSW directly.
Following the registration, you will need to estimate your burden monthly and make the required payments. You will need to perform an annual audit during the return period to adjust your payroll tax liability. If you underpay due to underreporting or had other compliance failures, you will need to pay penalty taxes. If you deal with interstate wages, you need to know the thresholds for all of the states in which you operate.
QuickBooks Accounting Software makes small business ownership and management simple. You can invest in Single Touch Payroll compatible cloud payroll software, accounting software, BAS, Goods and Services Taxes, and so much more.
Whether you need to simplify your business day, assistance calculating taxable wages, deductions explanations, or a handy rostering tool, QuickBooks can do it.
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