Payroll tax deductions
The Queensland Government has announced changes to payroll tax rates and thresholds from 1 July 2019.
A deduction may be available if your total annual Australian taxable wages are less than $6.5 million.
For annual Australian taxable wages over the $1.3 million threshold, the deduction reduces by $1 for every $4 of taxable wages over this amount. The deduction reduces to zero when your Australian taxable wages reach $6.5 million.
For example, currently the maximum monthly deduction is $108,333 and is reduced by $1 for every $4 over this amount. The deduction reduces to zero when monthly wages reach $541,666.
If you are part of a group, only the designated group employer can claim a deduction. The deduction is available if the group's total Australian wages are less than $6.5 million.
Changes to the amount of wages you pay throughout the year will affect the deduction you can claim in each return period. If you do not employ for the full financial year, the deduction will be adjusted proportionally.
Changes from January 2023
From 1 January 2023, the deduction range will increase, which means a reduction in payroll tax for small and medium businesses. For annual Australian taxable wages over the $1.3 million threshold, the deduction will change to $1 for every $7 of taxable wages over this amount.
More information on the deduction range will be available later this year.
Wage range for deduction
The table below shows the monthly and yearly wage range for the deduction for the 2012-13 financial year onwards.
|Financial year||Range for deduction|
|2019-20 to 2022-23||$108,333 to $541,666||$1,300,000 to $6,500,000|
|2012-13 to 2018-19||$91,666 to $458,333||$1,100,000 to $5,500,000|
Types of deductions
The type of deduction you can claim will depend on your circumstances and how your business operates.
|Deduction type||When to calculate||Who can claim||How to claim|
|Actual periodic||Every periodic return (usually one month)||You are not in a group and only pay wages in Queensland||When you lodge your periodic return, QRO Online will calculate the deduction amount|
|Fixed periodic||At the beginning of the financial year|
You are either:
Enter your deduction amount in the 'Fixed periodic deduction' field when you lodge your periodic return
|Annual||At the end of the financial year|
You are either:
|When you lodge your annual return, QRO Online will calculate the deduction amount|
Actual periodic deductions
You can claim an actual periodic deduction if you are not grouped and only pay Queensland wages. The deduction is based on the taxable wages you pay during a return period and is automatically calculated if you lodge through QRO Online.
You can also use our periodic liability calculator to work out your payroll tax for each return period.
If you pay payroll tax monthly and your taxable wages for the month are less than $541,666, calculate your deduction as shown. This example uses monthly Queensland taxable wages of $158,521.
Fixed periodic deductions
You can claim a fixed periodic deduction if you are not in a group but pay interstate wages, or you are a designated group employer.
Use the fixed periodic deduction estimator in QRO Online to work out your fixed periodic deduction.
In most cases, you only need to calculate your fixed periodic deduction at the start of each financial year (1 July) and enter the same amount in the 'Fixed periodic deduction' field when completing your periodic returns.
You should keep a record of your fixed periodic deduction on file.
Changes to your fixed periodic deduction
If any of the events in this table happen, you will need to:
- recalculate your fixed periodic deduction
- deduct the new amount from your wages for the remaining periodic returns for the year.
|Event||When to recalculate the deduction|
|You pay interstate wages||First day of the return period|
|You paid wages that increased or decreased by more than 30% of the wages you originally estimated||Last day of a return period|
|Your deduction is revoked or lapses||The day you are notified|
|Your periodic return period is changed||First day of new return period|
If you are a non-grouped employer that pays interstate wages, calculate your fixed periodic deduction as shown. This example uses estimated Queensland taxable wages of $387,524 and estimated Australian taxable wages of $1,500,000 for the financial year.
If you are the designated group employer, calculate your fixed periodic deduction using the estimated total Australian taxable wages of the group.
Note: If you pay payroll tax other than monthly (e.g. quarterly or half yearly), multiply the result of the calculation by the number of months in your return period to obtain your fixed periodic deduction. For example, if you pay quarterly, your fixed periodic deduction based on the figures below would be $26,911 × 3 = $80,733.
The annual deduction is automatically calculated when you lodge through QRO Online.
If you are not in a group, calculate your annual deduction from your Queensland taxable wages using your total Australian taxable wages for that year.
If you are the designated group employer, calculate your annual deduction using the total Australian taxable wages of the group.
If you are not a member of a group, calculate your annual deduction as shown. This example uses Queensland taxable wages of $1,356,789 and Australian taxable wages of $1,789,776.
Note: This example only applies if you employ for the full financial year. For part-year periods that start after 1 July and continue to 30 June, or that start on 1 July and end before 30 June (due to a status change), the deduction will be adjusted proportionally.