Payroll tax discount for regional businesses

Regional employers in Queensland may be entitled to a discount of 1% on the rate of payroll tax imposed on their taxable wages.

The discounted payroll tax rate for regional business is:

  • 3.75% for employers or groups of employers who pay $6.5 million or less in Australian taxable wages
  • 3.95% for employers or groups of employers who pay more than $6.5 million in Australian taxable wages.

These rates apply from 1 July 2019 to 30 June 2023.

Regional employer

You are a regional employer if:

  • your principal place of employment is in regional Queensland
  • and
  • you pay at least 85% of taxable wages to regional employees.

A principal place of employment is your registered business address if you have an ABN. Otherwise, it is the place at which your principal place of business is located.

A regional employee is someone whose principal place of residence is in regional Queensland.

Regional Queensland is defined as the following areas identified in the Australian Bureau of Statistics 2016 Statistical Area 4 (SA4) map:

  • Cairns
  • Central Queensland
  • Darling Downs Maranoa
  • Mackay - Isaac - Whitsunday
  • Queensland - Outback
  • Townsville
  • Wide Bay.

Claiming the discount

If you satisfy the eligibility criteria and select the regional employer rate discount in OSRconnect when lodging a payroll tax return, the discounted payroll tax rate will be applied automatically.

If you are a member of a group, you can claim the discount if you are eligible and other members of your group are not. This means some members of a group of employers may have different rates of payroll tax.

For example:

  • ABC Pty Ltd pays $3 million in Australian taxable wages. It is a regional employer and qualifies for the discounted payroll tax rate of 3.75%.
  • Company A and Company B are grouped for payroll tax. Their group pays $7 million in Australian taxable wages.
    • Company A is a regional employer. It will receive the regional discount and pay tax at the rate of 3.95%.
    • Company B is not a regional employer. It will not receive the discount, and will pay tax at the rate of 4.95%.

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