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Payroll Tax in Queensland
Payroll

Guide to Payroll Tax in Queensland: Rates and Thresholds

Employers in Australia might have payroll tax obligations, depending on how much they pay in wages. The principle is simple, but the legislation can be complicated for small business owners to navigate. 

It's a state and territory tax, meaning every state sets its rates and thresholds (read more about payroll tax rates and thresholds in NSW, ACT and SA).

It is calculated by the total taxable wages employers pay their employees. If you exceed your state or territory's threshold, you must register and pay.

Queensland payroll tax: rates, thresholds and due dates

The payroll tax in Queensland (QLD) is calculated based on the wages an employer pays monthly. This includes:

  • Contractor payments
  • Salaries
  • Remuneration for management and directors
  • Fringe benefits
  • Commissions
  • Superannuation
  • Bonuses
  • Allowances
  • Employee termination payments 


For the 2022-2023 financial year, the QLD Payroll tax threshold is $25,000 weekly. The monthly Payroll tax threshold is $108,333 or $1,300,000 annually. The rate for employers is 4.95% if you pay over $6.5 million in taxable wages. For employers or groups of employers in Queensland whose Australian taxable wages are $6.5 million or less, the payroll tax rate is 4.75%.

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Mental health levy

From January 2023, a mental health levy applies to the payroll tax to help fund mental health services.

The levy is applicable to employers who pay more than $10 million in annual Australian wages. The levy is applied to Queensland taxable wages that exceed the thresholds.

Australian taxable wages (annual)

Levy rate

$0 to $10 million

Nil

Greater than $10 million

0.25%

Greater than $100 million

0.25% + 0.5% (additional rate - mental health levy)

Payment due dates & taxable wages 

The annual reconciliation in QLD has a payment due date of 21 July. You must comply with the payroll tax rates and thresholds legislation. If you do not comply, you may receive a fine or penalty. 

QLD gives employers seven days from the close of the month to lodge and pay payroll tax. If this falls on a public holiday or weekend, you have until the next business day. 

Taxable wages cover both cash and non-cash wages, superannuation contributions, third-party payments, and salary sacrifice amounts. The latter are cash wages employees choose to relinquish in return for other benefits. 

Generally speaking, wage payments are payroll tax liability if they are payments the recipient has an enforceable right to or a reward in exchange for services rendered. 

What about contractor payments? Payroll tax contractors depend on whether the payroll tax regulations classify it as a relevant contract. Contractor arrangements that involve services are usually considered relevant for payroll tax purposes. Unless you have an exemption, you need to pay payroll taxes.

Payroll tax on fringe benefits 

A fringe benefit (FBT) is a non-monetary benefit you provide your employees in exchange for their services. Company cars are an excellent example of this – you provide your employee with a vehicle that they can use for private purposes. If you provide employees with gym memberships, low-interest loans, or other perks, these are fringe benefits, and you may need to include these as taxable wages in your tax return. 

You may need to pay payroll tax on FBT as taxable wages, even if the fringe benefit wasn't a cash payment.

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Payroll tax exemptions 

There are a variety of payroll tax exemptions, including employee leaves and allowances, trainee and apprentice wages, employment and contractor agents. 

Additionally, the Taxation Administration Act (TAC) 1953 allows exemptions for activities carried out by charitable institutions. There are a variety of allowances and exemptions available to businesses.

Regional business discounts 

Regional employers can claim a 1% discount on payroll tax rates. They are classed as regional as long as their primary base is in regional QLD, and 85% of their taxable wages are paid to regional employees. If you are investing in Queensland, Revenue QLD wants to reward that with a slight discount to encourage further investment.

Lodging & Paying Payroll tax returns in QLD 

You must register for payroll tax in QLD if you exceed the taxable wage threshold. When you lodge your payroll tax return, you need to pay your taxes owed by the due date. You can make an electronic payment by quoting your transaction number for the lodged returns via QRO Online

You will find the reference code on the confirmation page following your tax return submission. This will also provide you with an explanation of when and how to pay. If you pay through QRO Online, you will need to add your bank account details, submit your transaction, select payments, and choose pay from the actions column. 

When you lodge your return, be sure your estimate is as accurate as possible because if you report incorrectly, you can be fined. Before you lodge your return, print a copy of it. Once your return is submitted, you cannot change any details, so be sure to review the information you provided and rectify any errors before submission. You can email to request a reassessment if you realise you made an error in your submission. 

If you submit your returns monthly, you do not need to complete a separate return for June, as it will be included in the annual return. You also do not need to provide wage detail breakdowns when you lodge a periodic return; this is the information required in annual returns only. 

If your estimated taxable wages change, you can apply in writing to change your lodgement frequency. If you change employer status or are no longer employed, you have 21 days to file a final return.

Prepare for tax time with QuickBooks 

QuickBooks Accounting Software can help you manage risk when starting and growing your business. Whether you're employing people to work for you full and part-time or apprentices and trainees, you need reliable cloud payroll software and tax-ready accounting systems to keep your business running smoothly. QuickBooks provides one dashboard for everything, from rostering and payroll to business mentoring trend analysis.

Try it free for 30 days!


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