Navigating Payroll Tax for Growing Trade Firms
22 September 2026 · 5 min read · By Heaney Accounting
What is payroll tax?
Payroll tax is a state-based tax calculated on the total wages you pay your employees. As your trade business expands and you hire more staff, your total wage bill might cross the threshold that triggers this tax obligation.
Determining your liability
Every state in Australia has a different payroll tax threshold. You must monitor your monthly wage bill closely to see if you are approaching these limits. This includes base salaries, superannuation, and other taxable allowances.
- Base wages and salaries
- Superannuation contributions
- Allowances and fringe benefits
- Payments to some contractors
Important Note: Even if you do not think you hit the threshold, always check your state revenue office website annually. Thresholds can change, and penalties for under-reporting can be significant.
- Calculate your annualised wages every quarter.
- Verify if your contractors are considered employees for tax purposes.
- Register with your state revenue office once thresholds are met.
- Ensure your payroll software is configured to track taxable vs non-taxable components.
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