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As an employer based in QLD, you’ll need to get your head around payroll tax and how it affects you when you pay your staff. Payroll tax is a state-based tax and will thus be defined and applied differently from state to state. So, what are the details around QLD payroll tax?
What is payroll tax?
Payroll tax is a self-assessed tax applied to wages paid to Queensland employees when total wages exceed a certain threshold.
QLD employers pay payroll tax to the Queensland Revenue Office (QRO) on wages paid to their employees.
If you don’t exceed the threshold, you may not need to concern yourself with payroll tax. Keep in mind though, that the goalposts are in constant flux, so pay attention.
Australian taxable wages
Taxable wages are simply any wages paid to employees in Australia, including Queensland. You must report taxable wages when lodging your payroll tax return.
Who needs to register?
As an employer, you must register for payroll tax within 7 days of the end of the month in which you start paying wages above the threshold. You may still need to register for payroll tax even if you’re not required to pay it initially. So even if you’re under the threshold, you may still need to register.
Payroll tax thresholds and rates in QLD
- The threshold for QLD payroll tax is currently $1.3 million per annum or $25,000 per week, as of 2024. This threshold changes over time.
- The payroll tax rate in QLD in 2024 is 4.75% for businesses who pay total taxable wages of $6.5 million or less per year.
- The payroll tax rate in QLD in 2024 is 4.95% for businesses who pay total taxable wages of $6.5 million or more per year.
Registration process
Registering for payroll tax allows you to lodge returns and pay any liability. For Queensland based employers this means simply creating a QRO account and following the prompts to enter your business details.
From there, you will be given details of how and when to pay your tax and how and when to file a yearly return. You’ll be lead through the process and expectations, so don’t worry.
Payroll tax obligations
Once registered, you have obligations including lodging returns and paying any liability by the due date. You must lodge your payroll tax return on time to avoid penalties.
Paying any liability by the due date is crucial to avoid additional costs.
Payroll tax returns and payment
You’ll need to complete two separate types of action per year – periodic tax returns and annual returns.
Periodic tax returns
Periodic tax returns can be either monthly or half yearly. This will require you to report taxable wages for the period and pay any liabilities. These returns are due at various designated dates – which you will be informed about ahead of time.
Annual returns
You must also lodge an annual return, typically around the 21st of July each financial year, to complete your yearly obligations and ensure all your payroll tax has been paid.
Filing returns
Returns, both periodic and annual, are easily filed online through your QRO online account. There are also arrange of tools in there to help you calculate your tax liability.
Exempt wages and rebates
The QLD government provides various deductions, exemptions, and rebates to alleviate the payroll tax burden on certain businesses.
Common exemptions include wages paid to apprentices or trainees, certain wages paid to employees with a disability, and wages paid to employees engaged in charitable activities.
Deductions can be claimed for wages paid to employees on parental or long service leave.
Payroll tax grouping
So, what’s payroll tax grouping and how might it affect you?
Payroll tax grouping, or group employer provisions, is used in QLD to treat related businesses as a single entity for payroll tax assessment. The grouping provisions apply when there is a relationship of control or common control between entities.
Such grouping ensures businesses cannot artificially reduce their payroll tax liability by dividing their workforce or operations among multiple entities.
Compliance and penalties
Businesses need to know the QLD payroll tax’s key dates and deadlines to ensure timely lodgement and payment. The due date for payroll tax lodgement and payment is typically the 21st of the following month.
The OSR conducts regular audits to ensure businesses comply with payroll tax obligations. Penalties and interest charges may apply if errors or discrepancies are found during an audit.
