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 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 and rate of tax and the actual deductible amount and rate of tax.
You are not liable for payroll tax if you have 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).
You are entitled to a deductible amount if you have 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 moreAn employer pays $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 employer is entitled to receive a deductable amount as their 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 deductable 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 – deductable 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 deductable 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 – deductable amount) x rate
$550,000 - $44,871) x 5.5%
$505,129 x 5.5%
= $27,782.10
Full year
The tax payable 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