Queensland payroll tax: thresholds, rates and the deduction taper
Queensland's threshold looks generous until you meet the taper. Here is what you actually owe, how the deduction shrinks as you grow, and the two rules that catch multi-entity employers.
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: $1.3 million in annual Australian taxable wages (about $108,333 a month).
- Rate: 4.75% for $6.5 million or less, 4.95% for more than $6.5 million.
- Taper: The deduction reduces by $1 for every $7 of Australian taxable wages above $1.3 million, reaching nil at $10.4 million.
- On top: Mental health levy: 0.25% on Queensland wages above $10 million, and a further 0.5% above $100 million.
- Lodgement: monthly by the 7th, annual reconciliation by 21 July.
Figures verified against the Queensland Revenue Office on 24 August 2026.
Threshold and rates
Queensland taxes wages above $1.3 million, and the rate steps up once a business gets large. Both rates apply to your Queensland share of wages, not your national total.
| Annual Australian taxable wages | Rate |
|---|---|
| Up to $1.3 million | Nil |
| $6.5 million or less | 4.75% |
| more than $6.5 million | 4.95% |
The deduction taper is the part that surprises people
Most employers read "$1.3 million threshold" as "the first $1.3 million is always free". It is not. The deduction reduces by $1 for every $7 of Australian taxable wages above $1.3 million, reaching nil at $10.4 million.
The practical effect is a marginal rate well above 4.75% through the taper zone, because each extra dollar of wages both attracts tax and shrinks the deduction. A business planning to grow past $1.3 million should model the taper rather than assuming the headline rate — it is the difference between a predictable cost and an unpleasant annual reconciliation.
Mental health levy
Mental health levy: 0.25% on Queensland wages above $10 million, and a further 0.5% above $100 million. It applies proportionately to Queensland taxable wages above each threshold, so it is a levy on the excess rather than on your whole payroll. Most small and mid-sized employers never reach it; those that do should treat it as a separate line in their forecasting rather than folding it into the headline rate.
How to calculate it
- Add up your Australian taxable wages for the period — nationally, including any grouped entities.
- Work out the deduction you are entitled to after the taper.
- Apportion the deduction to Queensland if you employ interstate.
- Apply 4.75%, or 4.95% if the group pays more than $6.5 million.
- Add the mental health levy if Queensland wages exceed $10 million.
Step one is where most errors originate, because "wages" is broader than base pay — see below. If your wage base itself is uncertain because hours and penalty rates vary, the payroll cost calculator and shift cost calculator model that first.
What counts as wages
Broader than payroll. Queensland 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
- Termination payments, and shares or options issued to employees
- Payments to some contractors, where the relevant contract provisions deem them wages
The contractor limb is the one that generates assessments. A worker you treat as a contractor for tax purposes can still be caught for payroll tax, and getting the underlying classification wrong has consequences well beyond this tax — see contractor and labour-hire obligations.
Registering and lodging
You must register within seven days of the end of the month in which you first exceed the threshold. Registration and lodgement both run through QRO Online. Periodic returns are monthly, due by the seventh of the following month, with the annual reconciliation due 21 July. Lodge a nil return rather than skipping a month — a missed return attracts interest independently of whether tax was owing.
How queensland compares
Payroll tax is a state tax, so there are eight different answers. This is the whole picture, which matters if you are deciding where to put a second site or you already employ across borders.
| 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
- Treating the threshold as a permanent exemption. The deduction tapers away; above $10.4 million there is none at all.
- Testing Queensland wages instead of Australian wages. The threshold test is national; only the taxing is state-based.
- Ignoring grouping. Two entities under the threshold individually can be well over it together.
- Leaving super and fringe benefits out of the wage base. Both are taxable wages.
- Assuming contractors are outside the base. The contract provisions deem many of them in.
- Skipping nil returns. A missed periodic return attracts interest regardless of the amount.
Payroll tax starts with an accurate wage base
Every figure above 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 the Queensland Revenue Office and take advice for your situation.
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Related resources
Explore guides, insights, and templates to help you get more from this tool.
NSW payroll tax
Threshold, rate and the interstate apportionment rules from the other side of the border.
Victorian payroll tax
Threshold phase-out, the regional rate and the mental health and wellbeing levy.
WA payroll tax thresholds
How the WA taper works between $1 million and $7.5 million.
Queensland payroll tax FAQ
- Yes. Queensland employers pay payroll tax once their annual Australian taxable wages exceed $1.3 million. Below that threshold you have no liability and nothing to lodge. The rate is 4.75% for employers paying $6.5 million or less, rising to 4.95% for those paying more than $6.5 million. Note that the test is on Australian wages, not just Queensland wages — if you employ interstate, your group's national payroll decides whether you cross the threshold, and Queensland then taxes its share.
- $1.3 million in annual Australian taxable wages, which works out to about $108,333 a month. Queensland's threshold is not a clean exemption above that point: the deduction the deduction reduces by $1 for every $7 of Australian taxable wages above $1.3 million, reaching nil at $10.4 million.
- In Queensland for 2026–27 it is 4.75% on Australian taxable wages above $1.3 million, or 4.95% where wages exceed $6.5 million, plus the mental health levy for employers above $10 million. Every other state and territory sets its own figures — thresholds currently run from $1 million in Victoria to $2.5 million in the Northern Territory, and rates from 4% to 8.75%. The comparison table below covers all eight.