| Period | Maximum deduction | Rate | |
|---|---|---|---|
| Annual | Monthly | ||
| From 1 July 2025 onward | $1,000,000 | $83,333 |
4.85% 1.2125% for regional Victorian employers |
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From 1 July 2024, employers and groups with total annual taxable Australian wages between $3,000,000 and $5,000,000 are eligible for a reduced deduction, where the deduction is subject to a degree of phasing out.
The phase out rate for the financial year commencing on 1 July 2024 was 45%. From 1 July 2025 and each subsequent financial year it is 50%.
Employers and groups with total annual taxable Australian wages above $5,000,000 are not eligible for any deduction.
Read more about the payroll tax threshold changes.
Payroll tax surcharges
Two surcharges apply if you pay Victorian taxable wages and your Australian wages exceed the first annual threshold of $10 million, with a first monthly threshold of $833,333.
The mental health and wellbeing surcharge commenced from 1 January 2022.
The COVID-19 debt temporary payroll tax surcharge commenced from 1 July 2023, and applies until 30 June 2033.
Both surcharges are calculated on the same basis:
- Businesses with a national payroll above $10 million will pay a combined 1%.
- Businesses with a national payroll above $100 million will pay a combined 2%.
The surcharges only apply to businesses’ Victorian share of wages over these thresholds.
