What is the payroll tax threshold in WA?

In Western Australia, the payroll tax threshold is $1,000,000 per year (or $83,333 per month).

What is the payroll tax rate in WA?

The WA payroll tax rate is 5.5%.

How does the WA diminishing threshold work?

Between $1M and $7.5M annual wages, the deductible amount phases out using a tapering value simplified to 2/13 (reduces by $2 for every $13 above threshold).

Do I need to register if only my WA wages exceed $83,333 in a month?

Registration is triggered if you pay wages in WA (or IOT) and your total Australian taxable wages exceed $83,333 in any one month. For groups, the group's total Australian wages determine registration.

When are WA payroll tax returns and payments due?

WA guidance states returns are generally due by the 7th after the period ends; the June return is due by 21 July (along with annual reconciliation).

What wages are taxable for payroll tax in WA?

Taxable wages can include salaries/wages, bonuses, commissions, allowances, salary sacrifice, employer super contributions, fringe benefits, termination payments, employee share acquisitions, and some contractor payments.

EMPLOYMENT LAW

Payroll tax thresholds in WA: current threshold, rate, and how to calculate payroll tax

Q: Do I still lodge a payroll tax return if no tax is payable?

WA indicates a monthly return must be lodged each month whether or not tax is payable, unless you've had your return frequency changed.

A simple, practical guide for WA employers (including multi-state businesses)

Updated 21 Jan 2026 • Rules shown are based on current WA payroll tax guidance (in force from 1 July 2023) and the WA Payroll Tax Employer Guide

Written by

RosterElf Editorial Team

This guide provides general information about payroll tax in Western Australia (WA) as at the date of publication. It does not constitute legal, tax, accounting, payroll, or financial advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.

Payroll tax rates, thresholds, exemptions, and administrative requirements can change (often from 1 July). Always check the latest official WA Government payroll tax guidance and your Revenue Online settings before acting on this information.

Quick summary for time-poor owners

If you only skim one section, make it this:

WA threshold: $1,000,000 per year (or $83,333 per month) based on taxable wages.
WA rate: 5.5%.
Diminishing tax-free threshold: between $1M and $7.5M of annual Australian taxable wages, the deductible amount reduces gradually (tapering value 2/13).
Over $7.5M: no deductible amount—payroll tax is calculated on WA taxable wages × 5.5%.
Registration trigger: if you pay wages in WA (or the Indian Ocean Territories) and your total Australian taxable wages exceed $83,333 in any month, you must register (generally within 7 days after the end of that month).
Returns + payment deadlines: returns are generally due by the 7th after the period ends (June + annual reconciliation due by 21 July).
Big trap: threshold/eligibility is driven by total Australian taxable wages, not just WA wages—especially for multi-state employers and grouped businesses.

Overview: what payroll tax is (in plain English)

Payroll tax is a state/territory tax on taxable wages paid by employers. It's separate from PAYG withholding and superannuation—think of it as a tax on your payroll once you're over the threshold.

In WA, payroll tax is self-assessed: you calculate your liability and lodge returns (and pay) through WA Revenue Online.

WA payroll tax thresholds and rates

Key WA numbers (current settings)

Item	WA payroll tax setting
Annual threshold	$1,000,000
Monthly threshold	$83,333
Upper threshold (deduction phases out)	$7,500,000
Payroll tax rate	5.5%

These settings apply under the WA "diminishing tax-free threshold" system (in force from 1 July 2023).

How the WA "diminishing threshold" works

WA uses a deductible amount (a tax-free component) that:

is $1,000,000 when you're at the threshold, and
gradually reduces to $0 by the time total annual wages hit $7,500,000.

The tapering value formula is simplified by WA Government to 2/13. A practical way to remember it: The deductible amount reduces by $2 for every $13 of wages above the threshold.

Core formula

WA Government provides the core formula:

TV = AT / (UT − AT), simplified to 2/13

Deductible amount = AT − [(Wages − AT) × TV]

Where:

AT = annual threshold ($1,000,000)
UT = upper threshold ($7,500,000)
TV = tapering value (2/13)

Step-by-step: how to check the WA threshold and estimate payroll tax (7 steps)

1) Confirm you're in scope for WA payroll tax

You generally need to consider WA payroll tax if you pay wages in WA (or the Indian Ocean Territories) and may exceed the threshold.

2) Work out your employer type (this affects the calculation)

WA calculation depends on whether you are:

Local non-group employer (wages only in WA, not grouped)
Interstate non-group employer (wages in WA + other states, not grouped)
Local group employer (grouped; all members pay wages only in WA)
Interstate group employer (grouped; at least one member pays wages outside WA; group has a DGE)

3) Identify your "taxable wages" (don't guess)

WA's payroll tax "wages" definition is broad, and taxable wages can include:

salaries and wages
salary sacrifice
employer super contributions
fringe benefits
termination payments
employee share acquisitions
contractor payments (in certain cases)
commissions, bonuses, allowances, reimbursements, etc.

4) Determine what portion is "WA taxable wages" (nexus rules)

If employees work only in WA, wages are generally taxed in WA. If they work across states, WA applies consistent nexus tests (in order) to determine where wages are taxable.

5) Check the threshold (monthly + annual) and register if needed

WA registration is required if you:

pay wages in WA or the IOT, and
your total Australian taxable wages exceed $83,333 during any one month.

If you're in a group, it's the group's total Australian taxable wages that matter.

6) Calculate your deductible amount (if you're between $1M and $7.5M)

For most small and mid-sized employers, the key question is:

Are you above $1M but below $7.5M (annual wages)?

Yes → you may get a partial deductible amount
No → deductible amount is either full ($1M when you're at threshold) or $0 (at/above $7.5M)

7) Calculate payroll tax, lodge your return, and pay by the due date

WA payroll tax is lodged in returns through Revenue Online, with due dates generally:

7th of the following month for monthly periods, and
June + annual reconciliation due by 21 July.

Examples: payroll tax threshold calculations (WA government style)

Example 1: local WA employer, monthly wages below threshold

If an employer pays $70,000 taxable wages in WA in July, that's below $83,333 monthly, so no payroll tax is payable for that month.

Example 2: local WA employer, monthly wages over threshold

If an employer pays $100,000 taxable wages in WA in July:

Apportioned threshold amount for that month is $83,333
Deductible amount is calculated using tapering value 2/13
Tax payable for the month is $1,057.71

Example 3: local WA employer, annual wages $1.2M

If annual WA taxable wages are $1,200,000:

Deductible amount: $969,231
Payroll tax: $12,692.30

Example 4: Multi-state employer, deductible amount apportioned to WA

If an employer pays $1,000,000 in WA and $3,000,000 in South Australia (total Australian wages $4,000,000):

The annual deductible amount is calculated and then apportioned to WA
Resulting WA payroll tax (in the example): $47,596.18

Multi-state employers: the "total Australian wages" trap

If you pay wages in more than one state, WA payroll tax rules look at total Australian taxable wages for threshold/deductible calculations—then the deductible amount is apportioned to WA wages.

Practical implication

You can end up over the WA threshold even if WA wages alone are under $1M, because your total Australian wages can push you into liability territory.

Grouped employers: what changes?

If you're part of a payroll tax "group":

The group must have a designated group employer (DGE) and it must pay wages in WA.
Only the DGE can claim a deductible amount on behalf of the group during the year (and estimated deductible amounts depend on the group's estimated Australian wages being supplied).
Registration decisions and threshold tests can depend on total Australian taxable wages paid or payable by all members of the group.

What counts as "wages" for WA payroll tax?

The headline definition

WA guidance describes wages broadly as wages, remuneration, salary, commission, bonuses or allowances paid/payable to (or in relation to) an employee, whether cash or in kind.

Common taxable wage categories (often missed)

Taxable wages can include (among other items):

salary sacrifice
employer superannuation contributions
fringe benefits
commissions/bonuses/allowances
termination payments
contractor payments (in certain situations)

Common exemptions or special treatment (examples)

The WA wages checklist highlights items that can be exempt/not taxable or partially exempt, including:

apprentices' wages (exempt)
maternity leave (exempt)
GST component of wages (not taxable)
Commonwealth paid parental leave scheme (not taxable)

Important note

This is not a complete list—always confirm treatment of your wage items, especially contractors, allowances, and fringe benefits.

Returns, payment due dates, and annual reconciliation (WA)

Returns are self-assessed

You're responsible for calculating liability and paying via returns. WA notes payroll tax is self-assessed, with returns lodged through Revenue Online.

Standard due dates (monthly)

WA states:

The due date for lodging a return is the 7th day of the month immediately following the period.
A monthly return must be lodged each month whether or not tax is payable.
Payments are generally due by the lodgment due date (typically 7th of the following month), except June which is due by 21 July.

Return frequency: monthly vs quarterly vs annual

WA indicates returns are generally monthly unless you've requested to lodge less frequently, and provides a table by annual estimated liability:

Return frequency	Estimated annual liability
Monthly	≥ $150,000
Quarterly	< $150,000
Annually	< $20,000

Annual reconciliation

At year end, employers finalise wage adjustments as part of annual reconciliation. WA states annual reconciliation returns (with the June return) are due on or before 21 July, and the reconciliation process is completed in mid-August.

Common mistakes (WA payroll tax threshold edition)

Assuming the WA threshold is based only on WA wages

Multi-state employers can trigger liability based on total Australian taxable wages, with deductible amount apportioned to WA.

Forgetting "nil" returns

WA indicates monthly returns must be lodged each month whether or not tax is payable (unless your return frequency has been changed).

Missing June + annual reconciliation deadlines

June and annual reconciliation are due by 21 July, and reconciliation is processed mid-August.

Using outdated "higher rate" thresholds

WA's current guidance shows a 5.5% rate with a diminishing threshold system; higher-rate tiers appear in previous-years tables.

Under-declaring taxable wages

Items like employer super contributions, fringe benefits, allowances, and some contractor arrangements can be taxable wages under WA guidance.

Compliance checklist (copy/paste for your payroll SOP)

Track taxable wages monthly (WA + total Australia if multi-state).
Set a threshold alert: warn at ~$75k/month total Australian wages to avoid surprises.
Confirm employer type (local/interstate, group/non-group).
Register on time once you exceed the monthly threshold.
Lodge returns by the due date (typically the 7th; June by 21 July).
Prepare annual reconciliation: finalise wage adjustments and submit required info by 21 July.
Keep a wage-type checklist so you don't miss taxable categories.
Get advice if you operate across states, use contractors heavily, or may be grouped.

Final takeaways

WA payroll tax gets much easier when you treat it like a recurring monthly process, not a once-a-year surprise:

Know your threshold: $1M annually / $83,333 monthly
Know your rate: 5.5%
Understand the diminishing threshold between $1M and $7.5M
Multi-state and grouped employers must pay attention to total Australian wages
Lodge and pay on time: usually 7th monthly; 21 July for June/annual reconciliation

Sources and references

Primary sources used for this guide:

WA Government - Revenue WA: Official payroll tax guidance and thresholds.
WA Payroll Tax Employer Guide: Comprehensive payroll tax information for employers.
WA Government: Official state government resources.

This guide was last updated on 21 January 2026. Payroll tax rates and thresholds can change (often from 1 July). Always check WA Government Revenue WA for the latest rates and information.

FAQ

Frequently asked questions

In Western Australia, the payroll tax threshold is $1,000,000 per year (or $83,333 per month).
The WA payroll tax rate is 5.5%.
Between $1M and $7.5M annual wages, the deductible amount phases out using a tapering value simplified to 2/13 (reduces by $2 for every $13 above threshold).