Overview of payroll tax in Western Australia - YouTube

If you pay wages in Western Australia you may have  to pay payroll tax. Payroll tax is a state tax  

assessed on the wages paid by an employer in WA.  Payroll tax is self-assessed. That is, you as the  

employer declare and pay the appropriate amount  of payroll tax to the RevenueWA electronically.  

It is not tax withheld by you and remitted to the  ATO on behalf of your employee, as is the case  

with PAYE and PAYG. Once an employers or group  of employers total Australia-wide taxable wages  

exceed the monthly threshold amount, or the annual  threshold amount, they are required to apply to  

be registered for payroll tax purposes in western  Australia. WA payroll tax is only assessed on the  

WA taxable wages, however taxable wages paid to  employees in all Australian states and territories  

are considered when determining if the threshold  has been exceeded. The definition of taxable wages  

not only includes gross salary and wages,  but also commissions, bonuses , allowances,  

fringe benefits, superannuation contributions,  share or share option arrangements, directors  

remuneration and specified taxable benefits, paid  or payable, to or in relation to an employee,  

whether in cash or in kind. There are a  number of exemptions from payroll tax;  

religious organizations, hospitals, schools below  tertiary level, some government departments,  

public benevolent institutions and  certain charitable bodies or organizations  

may be exempt from payroll tax. Wages paid  to some apprentices, some overseas employees,  

new employees with a disability and workers  receiving payments in accordance with workers  

compensation legislation may be exempt  from payroll tax. Parental leave payments,  

defense force leave and emergency services  leave payments may also be exempt. Motor vehicle  

allowance and overnight accommodation allowances  are exempt up to certain prescribed limit.  

There is a rebate available for small to medium  businesses for new indigenous employees subject to  

certain eligibility criteria. Payroll tax returns  are lodged and paid online using our Revenue  

Online system. Revenue Online also allows for  adjustments to wage details previously declared,  

but only in the current financial period. Any  components of wages that is directly attributed  

to GST doesn't attract payroll tax, other  than wages comprising of fringe benefits.  

Payments to contractors will be deemed wages,  where an employer / employee relationship is  

considered to exist. However payroll tax is  not payable on GST component of these payments.  

Employers are required to maintain proper  records for a minimum period of five years.  

It is important to register when required, lodge  and pay on time, accurately declare wages and  

pay the correct amount, otherwise penalties may  apply. From 1 July 2018 to 30 June 2023, payroll  

tax is calculated on a tiered rate scale that  gradually increases the tax rate to a maximum of  

six and a half percent for employers or groups of  employers with annual taxable wages in Australia  

of more than $100 million dollars. As of 1 July  2020, the annual payroll tax threshold increased  

to $1 million dollars. This means if an employer  or group of employers pays Australian taxable  

wages of less than $1 million dollars annually,  they are not liable for payroll tax in WA.  

If an employer or group of employers pays  Australian taxable wages between $1 million  

dollars and $7.5 million dollars annually they  are liable to pay payroll tax at a rate of five  

and a half percent on their WA taxable wages,  but will be entitled to a tax-free threshold.  

This is a diminishing tax-free threshold which  gradually phases out for employers or groups  

of employers with annual taxable wages between  $1 million dollars and $7.5 million dollars.  

An employer or group of employers that pays  Australian taxable wages greater than $7.5  

million dollars and up to $100 million dollars is  not entitled to the tax-free threshold and liable  

to pay payroll tax at a rate of five and a half  percent on their or their group's total WA taxable  

wages. Employers or groups of employers that pay  Australian taxable wages of more than $100 million  

dollars are not entitled to the tax-free threshold  and the payroll tax rate is calculated according  

to a tiered rate scale that gradually increases  to a maximum rate of six and a half percent.  

If you would like to know more  information about payroll tax,  

you can visit the Department of Finance website at  www.wa.gov.au or call our office on 08 92621300.  

WA country callers can phone 1300 368 364.  You can also send through a web inquiry via

www.wa.gov.au/organisation/department-of-finance

Revenue wa has published a Payroll Tax  Employer Guide. This is a comprehensive  

resource about payroll tax in Western Australia.  You can locate the Payroll Tax Employer Guide  

on the WA.gov.au website. RevenueWA also offers  free information seminars relating to payroll tax.

Thanks for watching see you next time.