If your total Australian wage bill exceeds the tax-free threshold, you may need to register and pay payroll tax. This tax helps fund essential public services and supports economic development across the state.
Wage thresholds
Payroll tax applies to individual employers, companies and groups of related businesses.
You may be liable if you are an employer in Victoria and your taxable Australian wages exceed a certain threshold.
From 1 July 2025:
- the annual threshold is $1,000,000
- the monthly threshold is $83,333.
If your annual wages exceed $3 million, your tax-free threshold begins to reduce and phases out completely at $5 million. Read about the recent changes to the tax-free threshold.
If you are part of a group, the thresholds apply to the group’s combined wages.
If you employ staff for only part of the financial year, or have interstate wages, your thresholds will be adjusted proportionally.
Do I have to register for payroll tax in Victoria?
Taxable wages
Payroll tax is calculated on the total taxable wages you pay each month. This includes:
- salaries and wages
- superannuation contributions
- fringe benefits
- certain contractor payments
- termination payments.
Read more about wage components.
Exempt wages and organisations
Some wages and organisations are exempt from payroll tax. These exemptions help support charitable, educational and community-focused entities. They also ensure certain payments, like parental leave or volunteer service, aren’t taxed.
Learn more about exempt wages and organisations.
Registration and assessment
You must register for payroll tax if your wage bill exceeds the threshold.
Once registered, you can manage your obligations through PTX Express.
- Monthly returns are due by the seventh of the following month.
- The annual reconciliation must be lodged by 21 July each year.
Payroll tax rates and surcharges
The standard payroll tax rate in Victoria is 4.85%. Eligible regional employers pay a reduced rate of 1.2125%.
Additional surcharges apply for large employers:
- Mental health and wellbeing surcharge.
- COVID-19 debt temporary surcharge.
Combined, the surcharges are 1% of your Victorian taxable wages over $10 million and 2% of your Victorian taxable wages over $100 million.
These surcharges only apply to wages over the thresholds. Read more about the payroll tax surcharges.
