Payroll tax is calculated on the difference between the taxable wages paid in WA and the deductible amount to which you are entitled.
At annual reconciliation, you finalise the payroll tax returns to determine the actual deductible amount based on actual wages paid, and you calculate the total payroll tax payable.
A credit or debit amount may arise based on the difference between the estimated deductible amount and the actual deductible amount.
You are not liable for payroll tax if you have total WA taxable wages of not more than $1 million for the period 1 July 2023 to 30 June 2024 ($83,333 monthly).
You are entitled to a deductible amount if you have total WA taxable wages of more than $1 million but less than $7.5 million for the period 1 July 2023 to 30 June 2024.
Examples
Show moreMonthly calculation
An employer pays taxable wages in WA of $70,000 in July 2023. As the taxable wages are below the monthly threshold amount of $83,333, no payroll tax is payable.
An employer pays taxable wages in WA of $100,000 in July 2023. The apportioned threshold amount for the July 2023 return period is calculated as follows:
number of months in the return period x monthly threshold amount x (number of days taxable wages paid or payable in the return period /number of days in the return period)
1 x $83,333 x (31/31) = $83,333
The deductible amount for the July 2023 return period is calculated as follows:
apportioned threshold amount – [(total taxable wages – apportioned threshold amount) x tapering value]
$83,333 – [($100,000 – $83,333) x (2/13)]
$83,333 – [$16,667 x (2/13)]
$83,333 – $2,564
= $80,769
The tax payable for the July 2023 return period is calculated as follows:
(total taxable wages – deductible amount) x rate
($100,000 – $80,769) x 5.5%
$19,231 x 5.5%
= $1,057.71
Annual calculation
The employer then pays taxable wages in WA of $1,200,000 for the full year of 1 July 2023 to 30 June 2024.
The deductible amount for the full year is calculated as follows:
annual threshold amount – [(total annual taxable wages – annual threshold amount) x tapering value]
$1,000,000 – [($1,200,000 – $1,000,000) x (2/13)]
$1,000,000 – [$200,000 x (2/13)]
$1,000,000 – $30,769
= $969,231The tax payable is calculated as follows:
(total annual taxable wages – deductible amount) x rate
($1,200,000 – $969,231) x 5.5%
$230,769 x 5.5%
= $12,692.30
