Employer tax obligations
The 2 main taxes employers must be aware of are PAYG (pay as you go) withholding and payroll tax.
PAYG withholding is the Australian system for withholding tax from payments to employees.
If you have employees or pay employees of another business, you must withhold an amount from payments you make to them, to cover their income tax, any Higher Education Loan Programme (HELP) repayments and the Medicare Levy. Under the PAYG withholding system, you must report and send all amounts withheld to the Australian Taxation Office (ATO).
As an employer, you must:
- register for PAYG withholding
- work out the status of your workers (if applicable)
- work out the amount to withhold
- report and pay withheld amounts to the ATO
- provide payment summaries to employees and lodge an annual report with the ATO after the end of each income year.
Learn more about PAYG and the withholding system.
Payroll tax is imposed by each of the states and territories.
If you are an employer, or part of a group of employers, who pays taxable wages in Queensland and your weekly Australian wages are more than $21,153, you must register for payroll tax with Queensland Revenue Office.
You are liable to pay payroll tax in Queensland when your annual Australian taxable wages are $1.1 million or more. You must register for payroll tax if you exceed the weekly threshold, even if you think that you will pay less than $1.1 million in Australian wages in a year.
Learn more about registering for payroll tax in Queensland.