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 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).
You are entitled to a deductible amount if you have 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.
Examples
Show more1 July 2019 to 31 December 2019
An employer pays taxable wages in WA of $50,000 in July 2019. As the taxable wages are below the monthly threshold amount of $70,833, no payroll tax is payable.
An employer pays taxable wages in WA of $100,000 in July 2019. The apportioned threshold amount for the July 2019 return period is calculated as follows:
number of months in the return period x monthly threshold amount x (number of days taxable wages paid or payable in the return period /number of days in the return period)
1 x $70,833 x (31/31) = $70,833The deductable amount for the July 2019 return period is calculated as follows:
apportioned threshold amount – [(total taxable wages – apportioned threshold amount) x tapering value]
$70,833 – [($100,000 – $70,833) x (17/133)]
$70,833 – [$29,167 x (17/133)]
$70,833 – $3,728
= $67,105The tax payable the July 2019 return period is calculated as follows:
(total taxable wages – deductable amount) x rate
($100,000 – $67,105) x 5.5%
$32,895 x 5.5%
= $1,809.231 January 2020 to 30 June 2020
An employer pays taxable wages in WA of $60,000 in January 2020. As the taxable wages are below the monthly threshold amount of $79,167, no payroll tax is payable.
An employer pays taxable wages in WA of $100,000 in January 2020. The apportioned threshold amount for the January 2020 return period is calculated as follows:
number of months in the return period x monthly threshold amount x (number of days taxable wages paid or payable in the return period /number of days in the return period)
1 x $79,167 x (31/31) = $79,167The deductible amount for the July 2019 return period is calculated as follows:
apportioned threshold amount – [(total taxable wages – apportioned threshold amount) x tapering value]
$79,167 – [($100,000 – $79,167) x (19/131)]
$79,167 – [$20,833 x (19/131)]
$79,167 – $3,022
= $76,145The tax payable the July 2019 return period is calculated as follows:
(total taxable wages – deductible amount) x rate
($100,000 – $76,145)& x 5.5%
$23,855 x 5.5%
= $1,312.03Half year periods
An employer pays 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%
= $10,855.24The employer then pays 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%
= $14,169.87The tax payable for the full year is:
(1 July 2019 to 31 December 2019) + (1 January 2020 to 30 June 2020)
$10,855.24 + $14,169.87
= $25,025.11