NSW Payroll Tax Rate Reduction
7. January 2021
The NSW Government has announced a reduction in the payroll tax rate to 4.85 per cent for the 2020/21 and 2021/22 financial years.
The threshold has also increased to $1,200,000 for the 2020/21 and subsequent financial years.
These changes apply retrospectively from 1 July 2020.
| Tax year | Threshold | Tax rate |
| 01/07/2020 to 30/06/2021 | $1,200,000 | 4.85% |
| 01/07/2019 to 30/06/2020 | $900,000 | 5.45% |
| 01/07/2018 to 30/06/2019 | $850,000 | 5.45% |
About a Payroll Tax
If you’re an employer who pays wages in NSW, you must register for payroll tax if your total Australian wages exceed the relevant monthly threshold.
| Days in the month | Threshold |
| 28 | $92,055 |
| 30 | $98,630 |
| 31 | $101,918 |
What are ”Wages”?
Wages and other payments to employees engaged on a permanent, temporary or casual basis are subject to payroll tax.
- Wages
- Allowances
- Bonus / Commissions
- Director Fees
- Fringe Benefits
- Superannuation
- Salary Sacrifice
- Termination payments
- Third party payments
- Salary Sacrifice
If you would like a review of your “Wages” to staff and contractors in light of Payroll Tax please contact us for a quote.