Changes to NSW Payroll Tax Threshold

By Lucy Suthern

Are you required to register for Payroll Tax? 

Employers who pay wages in NSW are required to register for payroll tax when the total Australian wages exceed the relevant monthly threshold. Employers are required to register for payroll tax within seven days after exceeding the monthly threshold. The 2020 monthly thresholds are:

Days in the month	Threshold
29	$71,311
30	$73,770
31	$76,230

The NSW government announced in the 2020 Budget that it is implementing payroll tax cuts by progressively increasing the payroll tax threshold over the next 3 years as follows:

Tax Year	Tax Free Threshold
01/07/2018 to 30/06/2019	$850,000
01/07/2019 to 30/06/2020	$900,000
1 July 2020 to 30 June 2021	$950,000
1 July 2021 to 30 June 2022	$1 million

The current payroll tax rate is 5.45 per cent.

It is important to note however that the full annual threshold is only available to employers who:

• Pay wages throughout the full financial year
• Do not pay wages outside NSW
• Are not grouped with other businesses

In addition to the above changes, the NSW government has also announced further changes to the reporting obligations for businesses in order to streamline the payroll tax system.  These changes have not been implemented yet.

Annual payroll liability	Updated Payment Obligation	Annual Reconciliation Due Date (previously 21 July)
Up to $20,000	Annual payment	28 July
Between $20,000 and $150,000	Fixed monthly payment based on previous year’s payroll tax liability plus 3%	28 July
Above $150,000	Monthly payment based on monthly lodgements	28 July

If you have any questions or require assistance please contact our office on 02 6921 5444 or This email address is being protected from spambots. You need JavaScript enabled to view it..