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 deductable amount to which you are entitled.
For a monthly or quarterly return period, an estimated deductable 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 deductable 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 deductable 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 deductable 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 deductable amount allocated to the DGE and rate of tax and the actual deductable amount and rate of tax. Any unused deductable 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 WA 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 deductable amount if you are a member of a group that has total WA 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 taxable wages in WA of $600,000 for the full half year period of 1 July 2019 to 31 December 2019.
The deductible amount for the half year period is calculated as follows:
half year threshold amount – [(total taxable wages – half year threshold amount) x tapering value]
$425,000 – [($600,000 – $425,000) x (17/133)]
$425,000 – [$175,000 x (17/133)]
$425,000 – $22,368
= $402,632The tax payable the half year period is calculated as follows:
(total taxable wages – deductible amount) x rate
($600,000 – $402,632) x 5.5%
$197,368 x 5.5%
= $10,855.24
The group of employers then pay taxable wages in WA of $700,000 for the full half year period of 1 January 2020 to 30 June 2020.
The deductible amount for the half year period is calculated as follows:
half year threshold amount – [(total taxable wages – half year threshold amount) x tapering value]
$475,000 – [($700,000 – $475,000) x (19/131)]
$475,000 – [$225,000 x (19/131)]
$475,000 – $32,634
= $442,366The tax payable the half year period is calculated as follows:
(total taxable wages – deductible amount) x rate
($700,000 – $442,366) x 5.5%
$257,634 x 5.5%
= $14,169.87
The tax payable for the full year for the group is:
(1 July 2019 to 31 December 2019) + (1 January 2020 to 30 June 2020)
$10,855.24 + $14,169.87
= $25,025.11