A designated group employer (DGE) must be nominated for every group and must pay wages in WA. Only the DGE can claim any threshold amount on behalf of the group during the financial year.
Payroll tax is calculated on the difference between the taxable wages paid in WA and the deductible amount to which you are entitled.
For a monthly or quarterly return period, an estimated deductible amount and rate of tax is calculated and applied based on the group’s estimated Australian taxable wages supplied through the Estimated Taxable Wages function in Online Payroll Tax (Revenue Online).
An estimated deductible amount is allocated to the DGE and the estimated rate of tax is applied to all members of the group.
The DGE is responsible for submitting the group’s estimated Australian taxable wages on behalf of the group.
If estimated taxable wages are not submitted, there will be no deductible amount and a default rate of tax of 6.5% will apply.
At annual reconciliation, you finalise the payroll tax returns for each half year to determine the actual deductible amount and the rate of tax based on actual wages paid, and you calculate the total payroll tax payable for each half year. The annual liability is the sum of the liabilities for each half year.
A credit or debit amount may arise based on the difference between the estimated deductible amount allocated to the DGE and rate of tax and the actual deductible amount and rate of tax. Any unused deductible amount is allocated to other group members on a pro-rata basis.
You are not liable for payroll tax if you are a member of a group that has total Australian taxable wages of not more than:
- $425,000 for the period 1 July 2019 to 31 December 2019 ($70,833 monthly) and
- $475,000 for the period 1 January 2020 to 30 June 2020 ($79,167 monthly).
The DGE is entitled to a deductible amount if you are a member of a group that has total Australian taxable wages of more than:
- $425,000 but less than $3.75 million for the period 1 July 2019 to 31 December 2019 and
- $475,000 but less than $3.75 million for the period 1 January 2020 to 30 June 2020.
Example
Show moreA group of employers pay $1,000,000 in WA and $3,000,000 in South Australia for the whole financial year commencing 1 July 2019.
The taxable wages paid for both half year periods is tabled below.
| Period | WA taxable wages | Australian taxable wages |
|---|---|---|
| 1 July 2019 to 31 December 2019 | $450,000 | $1,600,000 |
| 1 January 2020 to 30 June 2020 | $550,000 | $2,400,000 |
| FY Total | $1,000,000 | $4,000,000 |
The DGE of the group is entitled to receive a deductible amount as the group's total Australian taxable wages for the financial year is less than $7.5 million.
Half year period 1 July 2019 to 31 December 2019
The deductible amount for the half year period is calculated as follows:
(Half year threshold amount – [(total Australian taxable wages – half year threshold amount) x tapering value]) x (total WA taxable wages/total Australian taxable wages)
($425,000 – [($1,600,000 – $425,000) x (17/133)]) x ($450,000/$1,600,000)
($425,000 – [$1,175,000 x (17/133)]) x ($450,000/$1,600,000)
($425,000 – $150,188) x ($450,000/$1,600,000)
$274,812 x ($450,000/$1,600,000)
$274,812 x 0.28125
= $77,291
The tax payable for the half year period is calculated as follows:
(total WA taxable wages – deductible amount) x rate
($450,000 - $77,291) x 5.5%
$372,709 x 5.5%
= $20,499
Half year period 1 January 2020 to 30 June 2020
The deductible amount for the half year period is calculated as follows:
(Half year threshold amount – [(total Australian taxable wages – half year threshold amount) x tapering value]) x (total WA taxable wages/total Australian taxable wages)
($475,000 – [($2,400,000 – $475,000) x (19/131)]) x ($550,000/$2,400,000)
($475,000 – [$1,925,000 x (19/131)]) x ($550,000/$2,400,000)
($475,000 – $279,198) x ($550,000/$2,400,000)
$195,802 x ($550,000/$2,400,000)
$195,802 x 0.2291666666666667
= $44,871
The tax payable for the half year period is calculated as follows:
(total WA taxable wages – deductible amount) x rate
$550,000 - $44,871) x 5.5%
$505,129 x 5.5%
= $27,782.10
Full year
The tax payable by the group for the full year is:
(1 July 2019 to 31 December 2019) + (1 January 2020 to 30 June 2020)
$20,499.00 + $27,782.10
= $48,281.10