TABLE OF CONTENTS
- What is the QLD payroll tax threshold?
- What is the QLD payroll tax rate?
- What is the Queensland mental health levy?
- What are taxable wages under QLD payroll tax?
- When do you need to register for QLD payroll tax?
- What wages are exempt from QLD payroll tax?
- When are QLD payroll tax returns due?
- Compliance and avoiding penalties
QLD payroll tax is a self assessed tax that employers pay on wages paid to Queensland employees. If your total Australian taxable wages exceed a certain threshold, youโre liable to register and pay payroll tax to the Queensland Revenue Office (QRO).
Read on for everything you need to know about QLD payroll tax rates, thresholds, the mental health levy, exempt wages, lodging returns, compliance and due dates. Be aware that payroll tax is a state tax, not a federal one, which means itโs separate from income tax administered by the Australian Taxation Office.
What is the QLD payroll tax threshold?
The QLD payroll tax threshold is $1,300,000 per year or $25,000 per week for the 2025โ26 financial year, which is the amount of total wages below which you donโt need to pay payroll tax.
The threshold is based on your total Australian taxable wages, not just Queensland taxable wages. That means if you employ staff in another state or territory, your wages paid in all states are included in the calculation, which will change your threshold entitlement.
What is the QLD payroll tax rate?
| Total Australian taxable wages | Payroll tax rate |
|---|---|
| $6.5 million or less | 4.75% |
| More than $6.5 million | 4.95% |
The payroll tax rate is applied to your Queensland taxable wages above the threshold amount. A business with $2 million in QLD taxable wages, for example, would pay 4.75% on $700,000 (the amount above the $1.3 million threshold), equalling $33,250 in QLD payroll tax.
To keep up to date on current rates, visit the QRO rates and thresholds page. Regional employers in Queensland could be entitled to a 1% discount on the payroll tax rate โ speak to the Queensland Revenue Office to find out if this applies to you.
What is the Queensland mental health levy?
In addition to the base payroll tax rate, a mental health levy applies for larger employers. The levy was introduced in January 2023 to help fund mental health services throughout the state.
The mental health levy thresholds are: 0.25% on Queensland taxable wages for employers with total Australian taxable wages above $10 million; and an additional 0.50% for employers with wages above $100 million.
What are taxable wages under QLD payroll tax?
Taxable wages include salaries, superannuation, contractor payments, vehicle allowances, fringe benefits, and leave payments. Payments to overseas workers carrying out duties in Queensland are also included here.
Contractor payments are liable for payroll tax unless the contractor meets the exemption criteria under certain conditions. If youโre unsure about your situation, check out the QRO website or contact the office for advice on how contractor payments should be treated.
When do you need to register for QLD payroll tax?
You have to register for payroll tax registration within seven days of the end of the week or month in which your wages first exceed the threshold. You can register online through the QRO portal.
You might still need to register even if you arenโt yet liable to pay. Once registered, you have to lodge returns and pay any liability by the due date. If your business is a member of a group, all group membersโ wages are combined to determine whether the threshold has been exceeded or not.
What wages are exempt from QLD payroll tax?
The QRO has a few exemptions, deductions and rebates available. As such, all employers and groups should review whether an exemption applies to any of the following:
- Trainee wages paid to apprentices and trainees โ eligible employers can claim a rebate.
- Genuine redundancy payments made under set conditions.
- Wages paid by charities, religious bodies and public hospitals.
- Wages paid to employees with a disability engaged in eligible programs.
- Non-working directors who receive no payment for services could also be exempt.
Deductions can be applied to minimise your taxable amount. Read the full list of exemptions on the QRO exemptions page. Just be aware that rules can change every year, so always check the updated schedule before lodging your paperwork.
When are QLD payroll tax returns due?
Returns can be monthly or half-yearly. Monthly returns are due by the seventh of the following month. The annual return must be lodged and payment made by 21 July at the end of the financial year.
Make sure you stay on top of lodging returns and pay any liability on time. Penalties and interest will apply if youโre late or if you report anything incorrectly. To make life easier, use payroll software to track your Queensland employeesโ wages and ensure your payroll tax obligations are always met.
If you have any further questions about QLD payroll tax, visit the QRO website or speak to an accountant or tax advisor. As an employer based in QLD, youโll need to get your head around payroll tax and how it affects you when you pay your staff. Payroll tax is a state-based tax and will thus be defined and applied differently from state to state.
Compliance and avoiding penalties
Businesses need to know the key dates and deadlines for QLD payroll tax to ensure timely lodgement and payment. The due date for payroll tax lodgement and payment is typically the 21st of the following month.
The OSR conducts regular audits to ensure businesses comply with payroll tax obligations. Penalties and interest charges may apply if errors or discrepancies are found during an audit.
