Payroll tax in NSW: the threshold, grouping and registering

Two numbers, two different jobs

Payroll tax is a tax employers pay, assessed on the wages they pay employees. Its threshold is published two ways, and each does a different job.

Revenue NSW works out the monthly figure as the days in the month, divided by the days in the year, times the yearly threshold. The Act words its own test by the week: an employer that is not already registered must apply if, during a month in a financial year, it pays or is liable to pay, anywhere, “wages of more than the weekly threshold amount per week that are wholly or partly taxable wages” (section 86(1)(a)). The application is due “within 7 days after the end of the month concerned” (section 86(2)).

For a growing business the monthly test often comes first: one month’s wages can pass the monthly figure before the year’s total passes $1,200,000. Revenue NSW’s registration page asks businesses to monitor their wage levels and register within 7 days after the month in which their total Australian wages go above the monthly threshold.

The wages counted are Australian, not only NSW

Both tests look at total Australian wages. Revenue NSW describes the tax as calculated on the gross Australian wages employers pay employees, and a business with staff in more than one state gets a share of the NSW threshold, not all of it.

• Staff only in NSW, all year. The full threshold for that year applies, and tax is worked out on the wages above it.
• Staff in NSW and interstate. The NSW threshold is the proportion of total Australian wages paid in NSW. In Revenue NSW’s own example, a business paying 80 per cent of its wages in NSW is entitled to 80 per cent of the threshold.
• Starting or stopping part way through a year. A business that starts or stops employing in NSW within the financial year gets a threshold in proportion to the days it employed, over the days in the year.

Grouping: one threshold for related businesses

A second company or trust set up beside the first does not bring a second threshold if the two are grouped. Businesses can be grouped where there is a link between them, and only one member of a payroll tax group can claim the annual threshold.

The registration test works the same way for a group. A business that is part of a group must register as a grouped employer if the total Australian wages of every business in the group pass the monthly threshold in any month; section 86(1)(b) of the Act counts the wages the members “together” pay.

Designated Group Employer (DGE)

The member a group nominates. It claims the threshold, and includes the taxable wages of the other members in its returns.

Non-Threshold Claimer (NTC)

Any member that is not the DGE. It receives no threshold.

Group Single Lodger (GSL)

Nominated where no member qualifies as DGE, or the members want to lodge a joint return. It lodges and pays for every member of the group.

Revenue NSW adds two points under its grouping pages. Under its heading on illegal phoenix operators, an entity and a former entity are grouped if the same third party sufficiently influenced them. And it may grant an exclusion order from a grouping.

After registering: the payroll tax year

Once registered, a business starts paying payroll tax to Revenue NSW and keeps a set rhythm of returns.

1. Each month except June

   A return for that month, within 7 days after the month ends (section 87(1)(a)).

2. How often to pay

   Where the estimated NSW tax for a financial year is $20,000 or less, monthly or annual payment is allowed; above $20,000, payment is monthly (Revenue NSW’s registration page, last updated 1 June 2026).

3. End of June

   An annual return within 28 days after the end of June, which also adjusts the tax paid during the year (section 87(1)(b)). Revenue NSW lists the 2026 annual return as due on 28 July 2026 and the 2027 annual return on 28 July 2027. With the Chief Commissioner’s approval, a designated group employer may lodge one joint return for itself and named members of its group; if that return would comply when lodged by a single employer, each employer it covers is taken to have complied (section 87(2) and (3)).

4. Every registered business

   The annual return is lodged even when it is a nil return.

Revenue NSW says the lodgement dates are set by legislation, that a payment after its due date may attract interest, a penalty or both, and that a business unable to pay is asked to contact it before the due date.

Exemptions

Not-for-profits and religious institutions may apply for an exemption, and some kinds of wages, maternity leave among them, are exempt. An organisation whose application succeeds is registered as exempt for up to three years, and is responsible for telling Revenue NSW of any change that may affect the exemption. If an application is declined and the organisation has not already registered, it registers and pays from the applicable date.