Payroll Tax

Changes from 1 January 2019

From 1 January 2019, businesses with annual taxable Australia wide wages of up to $1.5 million will not be liable for payroll tax, and those with taxable wages between $1.5 million and $1.7 million will benefit from a reduced payroll tax rate. For businesses grouped for payroll tax the $1.5 million threshold relates to the total of all group members taxable wages.

The deduction entitlement remains unchanged. Where a business is required to pay payroll tax, they will continue to receive a deduction entitlement of up to $600 000.  For businesses with taxable Australia wide wages exceeding $1.5 million, payroll tax will be payable on taxable wages less any deduction entitlement up to a maximum of $600 000.

For businesses/groups with taxable Australia wide wages between $1.5 million and $1.7 million a variable rate from 0% to 4.95% will apply.

As these changes come into effect mid-financial year, the 2018-19 financial year will be split into two return periods:

Period 11 July 2018 to 31 December 2018
Period 21 January 2019 to 30 June 2019

What do I need to know?

Employers with estimated wages under $1.5 million for 2018-19

From 1 July 2019, you will no longer be required to pay payroll tax in South Australia if your Australia wide wages, or group wages, continue to remain below $1.5 million.

Will I need to continue to lodge monthly returns?

No. If you have advised RevenueSA that your estimated Australia wide wages, or group wages, for the 2018-19 financial year are under $1.5 million, RevenueSA will convert you to an annual cycle so you will not be required to lodge returns for the January 2019 to May 2019 return periods.

Can I cancel my registration?

No. Although you will only pay tax for the July to December period liability for 2018-19 is based on the full year’s wages. Actual tax due can’t be calculated until the full year’s wages are known. If you expect your 2019-20 financial year Australia wide wages, or group wages, to remain under $1.5 million, you should cancel your registration as part of the 2018-19 Annual Reconciliation. If you cease employing in South Australia before 30 June 2019, please contact RevenueSA.

When can I lodge my 2018-19 Annual Reconciliation?

You will be required to complete the 2018-19 Annual Reconciliation by 22 July 2019. An email will be sent to you once the Annual Reconciliation opens in mid-June 2019.

Employers with estimated wages between $1.5 million and $1.7 million for 2018-19

Will the rate change for my monthly returns?

Yes. You will continue to lodge your monthly returns using your current deduction entitlement. The rate of tax you pay will be automatically calculated at the new rate when you complete and lodge your returns.

The rate at which payroll tax is applied will depend on your estimated annual wages (for Period 2 this will be between 0% and 4.95%). This will be automatically calculated through the online return process and a calculator will be available mid December 2018 to calculate your new rate.

Will both periods be calculated in my 2018-19 Annual Reconciliation?

Yes. When you complete your 2018-19 Annual Reconciliation you will need to provide a split of your, or your group’s, total South Australian wages for the year., Payroll tax payable and the deduction entitlement will be calculated based on the proportion of your wages paid in each period. A screen in the annual reconciliation will show the tax due for each period.

Employers with wages over $1.7 million for 2018-19

No change. You will continue to lodge your monthly and annual reconciliations returns using your current deduction entitlement (up to $600 000 p.a.).

Payroll Tax Rate Change Summary

Annual Taxable WagesFY 2018 -2019FY 2019-20 onwards
July to DecemberJanuary to June
$600 000 - $1.5 millionVariable 2.5% to 4.95%0%0%
$1.5 Million to $1.7 million4.95%Variable 0% to 4.95%Variable 0% to 4.95%
Over $1.7 million4.95%4.95%4.95%

More information

  • You can register for our webinars in November 2018 that will  explain these changes.
  • Information will also be sent in June 2019 prior to the 2018-19 Annual Reconciliation. Webinars will also be conducted in June/July 2019 to assist you in completing your annual reconciliation.
  • If you have specific questions, please contact our payroll tax team at payrolltax@sa.gov.au or (08) 8204 9880.

Payroll Tax

Further information is also available in the Payroll Tax Guide to Legislation.


Who is liable for payroll tax?

A payroll tax liability arises in South Australia when an employer (or a Group of employers) has a wages bill in excess of $600 000 for services rendered by employees anywhere in Australia if any of those services are rendered or performed in South Australia.

See Revenue Ruling PTA039 for further information.

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Registration

An employer (or a member of a group of employers) who, in any month, pays wages which are liable to payroll tax in South Australia must register for payroll tax when the Australian taxable wages of the employer or group exceeds $50 000 in any month (from 1 January 2019 this increases to $125 000).

For ease of administration, RevenueSA recommends such registration when an employer's taxable wages consistently exceeds $11 538 per week (from 1 January 2019 this increases to $28 846).

Register for payroll tax 

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Tax rates and wage thresholds

Legislative amendments to reduce payroll tax for small business are included in the Payroll Tax (Exemption for Small Business) Act 2018, assented to on 25 October 2018.

From 1 January 2019, businesses with annual taxable wages of up to $1.5 million will not be liable for payroll tax and those with taxable wages between $1.5 million and $1.7 million will benefit from a reduced payroll tax rate.

Effective Date Annual Australian Taxable Payroll
Does not exceed
$600 000
Exceeds $600 000
but not $1 million
Exceeds $1 million
but not $1.5 million
Exceeds $1.5 million but not $1.7 millionExceeds $1.7 million
from 1 January 2019nilvariable from 0% to 4.95%4.95%
1 July 2017 to 30 December 2018 nil 2.5% variable from 2.5% to 4.95% 4.95%
1 July 2009 to 30 June 2017 nil 4.95%

A 2018-19 Financial Year Calculator is currently being developed.

Variable PRT Calculator

Calculate your rate here for:

  • 2017-18 financial year
  • 1 July 2018 to 31 December 2018

Enter total Australian wages (if you are part of a group, please enter your group's total Australian wages) for the full financial year*



*NOTE: the rate is based on annualised wages. e.g. If you employ for only 150 days in the year and the wages paid during that period is $630 000, your annualised wages total would be calculated as follows:
$630 000/150 multiplied by 365 or 366 days. Your annualised wages would therefore be $1 533 000.

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What payments are considered 'wages'?

In general any remuneration attributed to employees is included. Common items are wages, salaries, commissions, bonuses, allowances, directors fees, fringe benefits, payments in kind, eligible termination payments and superannuation contributions.

Additionally, payments for service contracts, to employment agencies, and to other third parties may be deemed to be wages assessable for payroll tax. With respect to service contracts and employment agencies, refer to the Relevant Contractors Decision Tools page.

For further information, refer to the Payroll Tax Guide to Legislation.

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Are contractor payments considered 'wages'?

With respect to service contracts and employment agencies, please refer to the Relevant Contracts Decision Tools page.

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Groups

Grouping Provisions within the Payroll Tax Act 2009 are designed to ensure employers are not able to artificially maintain their wages bill below $600 000 per annum by splitting their businesses into separate employing entities.

Businesses may be grouped where:

  • one company is related to another company under Section 50 of the Corporations Act 2001 (Cwlth); or
  • Businesses have common employees; or
  • the same person or persons together, have a controlling interest of more than 50% in each of two or more businesses; or
  • an entity has a direct, indirect or aggregate controlling interest in a corporation (“tracing provisions”).

    This is not an exhaustive list.

Only one employer in a group is able to utilise the allowable deduction entitlement. This employer is known as the Designated Group Employer. Any annual deduction entitlement not taken up by the Designated Group Employer can be transferred to the other group members only at the time of Annual Reconciliation.

As this is a complex area, and cannot be fully covered in a brief document, further information should be sought from RevenueSA if you suspect Grouping Provisions may affect you.

For further information, refer to:

Information Circular 4 - Groupings

Commissioner's Discretion to Exclude from a Group - PTA031

Grouping of Professional Practices & Administrative Businesses - PTA017

Application to Exclude from a Group

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Employment outside South Australia

The full annual deduction entitlement of $600 000 is only available to employers (or group of employers) who do not pay wages in another state or territory.

If wages are paid elsewhere in Australia the deduction entitlement is calculated using wage estimates for a full financial year and applying the formula below:


Total South Australian Wages X  $600 000
Total Australian Wages

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Payroll tax nexus arrangements

What if an employee works in multiple states?

Where a business has an employee working in in more than one state or territory in one month payroll tax will be liable in the state or territory where the employee has their principal place of residence.

Where the worker does not reside in Australia, tax is to be paid to the state or territory where the registered Australian Business Number (ABN) address of the employer is located.

Further information is available in Revenue Ruling PTA039.

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More information

More detailed information is available in the Payroll Tax Guide to Legislation and the Payroll Tax Information Circulars and Revenue Rulings.

Watch harmonised payroll tax education videos and register for harmonised payroll tax webinars.

View the Payroll Tax Act 2009

You can be automatically informed of any changes to payroll tax or other tax information by subscribing to RevenueSA’s free Electronic Subscription Services.

You can subscribe via our  Subscription Service page.

Other enquiries

Taxation Services – Payroll Tax
GPO Box 1353
ADELAIDE  SA 5001

Telephone: (08) 8204 9880
Fax: (08) 8226 3805
Email:payrolltax@sa.gov.au

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