ACT payroll tax: the only jurisdiction with no taper
The ACT charges the highest headline rate in the country at 6.85% — and is simultaneously the best deal for many mid-sized employers, because it is the only jurisdiction that lets you keep the full threshold no matter how large your payroll grows.
Payroll tax turns on your own circumstances — grouping, interstate wages, contractor arrangements and exemptions all change the answer. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
Quick summary
- Threshold: $1.75 million in annual Australian taxable wages (about $145,833 a month).
- Rate: 6.85%, rising to 8.75% for more than $150 million.
- Threshold treatment: No taper — the full threshold is available regardless of payroll size, which makes the ACT the most generous jurisdiction for mid-sized employers.
- Administered by: ACT Revenue Office.
Verified against ACT Revenue Office on 24 August 2026. Current settings effective from 1 July 2026.
The full threshold, at any size
Every other state and territory withdraws the threshold as you grow: Queensland at $1 for every $7, the NT at $1 for every $4, Victoria phasing it out entirely above $5 million. The ACT does not. The full $1.75 million deduction is available whatever your payroll, which makes the headline 6.85% rate genuinely comparable to the mainland's lower rates once the taper is accounted for.
Work an example. At $5 million of wages a Queensland employer has lost most of its deduction, while an ACT employer still deducts the full $1.75 million and pays 6.85% on $3.25 million. The comparison is much closer than the headline rates suggest — which is the single most useful thing to know about ACT payroll tax.
Two dates matter for 2026: the threshold rose to $1.75 million ($145,833.33 a month) from 1 July 2026, and a new 8.75% rate began applying to employers with Australia-wide wages above $150 million from 1 January 2026 — a mid-year start, unlike most payroll tax changes.
What counts as wages
Broader than base pay. Taxable wages include:
- Salary, wages, overtime, penalty rates and loadings
- Commissions, bonuses and allowances beyond the exempt rates
- Superannuation contributions, including salary sacrifice
- Fringe benefits at their grossed-up value, and termination payments
- Payments to some contractors, where the contract provisions deem them wages
The contractor limb generates most assessments. A worker treated as a contractor for income tax can still be caught for payroll tax — and the underlying classification carries consequences well beyond this tax, as contractor and labour-hire obligations covers.
Grouping and interstate wages
Two rules catch employers who believe they are under the threshold. Grouping combines related businesses so they share one threshold rather than one each. And the threshold test uses your Australian taxable wages, not your the ACT wages — so a national employer with a small the ACT presence can be liable here on the strength of its interstate payroll, with the ACT taxing its share and pro-rating the deduction.
Registering and lodging
Register with ACT Revenue Office once you cross the threshold. Returns are generally monthly with an annual reconciliation, and the safest habit is to lodge a nil return rather than skip a period — missed returns attract interest whether or not tax was owing.
How the ACT compares
Payroll tax is a state tax, so there are eight different answers. Worth knowing in full if you employ across borders or are choosing where to open a second site.
| Jurisdiction | Annual threshold | Monthly | Headline rate |
|---|---|---|---|
| New South Wales | $1.2 million | $101,918 | 5.45% |
| Victoria | $1 million | $83,333 | 4.85% |
| Queensland | $1.3 million | $108,333 | 4.75% – 4.95% |
| Western Australia | $1 million | $83,333 | 5.5% |
| South Australia | $1.5 million | $125,000 | 4.95% |
| Tasmania | $1.25 million | Pro-rated by days | 4% – 6.1% |
| Northern Territory | $2.5 million | $208,333 | 5.5% – 6.5% |
| Australian Capital Territory | $1.75 million | $145,833 | 6.85% – 8.75% |
Each row is maintained in one place and carries its own source link and verification date. The same figures are published as an open dataset at /data/payroll-tax/thresholds.csv.
Common mistakes
- Comparing headline rates alone. 6.85% with a full deduction can cost less than 4.85% with none. Model your own payroll.
- Assuming changes land on 1 July. The ACT's 8.75% high-wage rate started 1 January 2026, mid financial year.
- Leaving super and fringe benefits out of the wage base. Both are taxable wages.
- Ignoring grouping. Related entities share one threshold, not one each.
Payroll tax starts with an accurate wage base
Every figure here depends on knowing what you actually paid, including overtime, penalty rates and allowances. RosterElf applies award rates to approved timesheets and feeds them to Xero or MYOB, so the wages you report are the wages you paid.
Start free trialGeneral information only, not tax advice. Payroll tax turns on your own circumstances — grouping, interstate wages, contractor arrangements and exemptions all change the answer. Verify with ACT Revenue Office and take advice for your situation.
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Australian Capital Territory payroll tax FAQ
- $1.75 million in annual Australian taxable wages, or about $145,833 a month. No taper — the full threshold is available regardless of payroll size, which makes the ACT the most generous jurisdiction for mid-sized employers. Below the threshold you have no liability and nothing to lodge.
- 6.85%, rising to 8.75% for employers paying more than $150 million, applied to the ACT share of taxable wages. Rates and thresholds are set independently by each state and territory — the comparison table on this page covers all eight.
- The headline rate is higher, but the comparison is misleading on its own. The ACT has no threshold taper, so mid-sized employers keep a deduction their mainland counterparts have lost — and the ACT has no payroll tax surcharge or mental health levy of the kind Victoria and Queensland apply above $10 million. Compare effective cost at your actual payroll rather than comparing headline rates.