Tasmanian payroll tax: the only two-band rate in the country
Tasmania is the one jurisdiction with a genuinely low first band. Between $1.25 million and $2 million you pay 4% — well under every other state — and then 6.1% above it, which is well over most. Where you sit relative to $2 million matters more here than anywhere else.
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: $1.25 million in annual Australian taxable wages, pro-rated monthly by the number of days.
- Rate: 4%, rising to 6.1% for $2,000,001 and above.
- Threshold treatment: No taper — the two bands apply directly, and the monthly threshold is pro-rated by the number of days in the month.
- Administered by: State Revenue Office Tasmania.
Verified against State Revenue Office Tasmania on 24 August 2026. Current settings effective from 1 July 2018.
Two bands, and the step at $2 million is steep
Most jurisdictions have one headline rate and taper the threshold. Tasmania has two flat bands and no taper at all: 4% on wages between $1,250,001 and $2,000,000, then 6.1% on wages above $2,000,000.
That makes Tasmania the cheapest place in Australia to run a payroll of around $1.5 million, and one of the more expensive above $3 million. For a business planning growth through that range, the step from 4% to 6.1% is a 52% increase in the marginal rate — worth modelling before it arrives rather than discovering at the annual reconciliation.
There is one further Tasmanian quirk: the monthly threshold is not a flat figure. It is calculated as the number of days in the month divided by the days in the year, multiplied by the annual threshold, and rounded to the nearest dollar. So February's threshold is genuinely lower than March's.
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 Tasmania wages — so a national employer with a small Tasmania presence can be liable here on the strength of its interstate payroll, with Tasmania taxing its share and pro-rating the deduction.
Registering and lodging
Register with State Revenue Office Tasmania 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 tasmania 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
- Using a flat monthly threshold. Tasmania pro-rates it by the number of days in the month, so a fixed monthly figure will drift.
- Forgetting the 6.1% band exists. Wages above $2 million attract a rate higher than most of the mainland.
- 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 State Revenue Office Tasmania and take advice for your situation.
Other employment law guides
Explore other state-based guides for long service leave, workers' compensation, and payroll tax
Unfair Dismissal
Who can claim, the 21-day limit, the compensation cap and how it is really calculated
SA Long Service Leave
13 weeks after 10 years, pro-rata at 7 years, payment calculations
Victoria Long Service Leave
7-year eligibility, progressive entitlement, portable schemes
QLD Long Service Leave
10-year entitlement, 7-year pro-rata, QLeave portable schemes
Victoria Workers' Compensation
WorkCover claims, weekly payments (PIAWE), treatment expenses
SA Workers' Compensation
ReturnToWorkSA claims, income support, return to work planning
Tasmania payroll tax FAQ
- $1.25 million in annual Australian taxable wages, pro-rated monthly by the number of days in the month. No taper — the two bands apply directly, and the monthly threshold is pro-rated by the number of days in the month. Below the threshold you have no liability and nothing to lodge.
- 4%, rising to 6.1% for employers paying $2,000,001 and above, applied to the Tasmania share of taxable wages. Rates and thresholds are set independently by each state and territory — the comparison table on this page covers all eight.
- Yes — Tasmania runs a payroll tax rebate for wages paid to apprentices, trainees and youth employees in eligible industries, and a separate exemption for businesses that relocate to regional Tasmania. Both are administered by the State Revenue Office and both require application rather than applying automatically, so they are easy to miss. If you employ apprentices in Tasmania, check eligibility before lodging your annual return.