WA Payroll Tax 2026-27: Threshold, Rate and Calculator

Published: 3 November 2026

WA payroll tax is 5.5% of taxable wages, and it only applies once your total Australian wages (or your group's) go over $1 million a year. Between $1 million and $7.5 million you get a deductible amount that shrinks as wages rise. At $7.5 million and above, the full 5.5% applies to every dollar of WA wages.

Last fact-checked: 3 November 2026, against RevenueWA's payroll tax employer guide and the 2026-27 WA State Budget. Pay rates, rules and job numbers change; follow the linked source before you act.

Who has to pay payroll tax in WA?

You pay WA payroll tax if you pay wages in Western Australia and your total Australian taxable wages are more than $1 million in the financial year. The threshold is tested on Australia-wide wages, not just WA wages. RevenueWA also administers payroll tax for the Indian Ocean Territories (Christmas Island and the Cocos (Keeling) Islands).

Grouping stops businesses splitting a payroll to stay under the threshold. If businesses are grouped, their wages are added together and the group gets one threshold. You're grouped if:

the businesses are related companies under the Corporations Act (for example a holding company and its subsidiaries)
the same person or people own or control more than 50% of each business, directly or through a chain of companies or trusts
an employee works solely or mainly for another business, or staff are shared between businesses under an arrangement

One member, the designated group employer, claims the whole deductible amount. Every member still registers and lodges, and all members are jointly liable for the group's tax. The Commissioner can exclude some businesses from a group (never related companies) if the tests in Commissioner's Practice PTA 031 are met. Apply with form FPRT2.

What is the WA payroll tax threshold and rate for 2026-27?

For 2026-27 the threshold is $1,000,000 a year, the monthly threshold is $83,333, the upper threshold is $7,500,000 and the rate is 5.5%. The thresholds are set in section 8 of the Pay-roll Tax Assessment Act 2002 for every financial year from 1 July 2020. The 2026-27 State Budget made no payroll tax changes; its only revenue policy decision was a housing taxation package.

WA payroll tax rates and thresholds, in force from 1 July 2023 and unchanged for 2026-27
Annual Australian taxable wages	How WA payroll tax is worked out
$1,000,000 or less	Nil
More than $1,000,000, less than $7,500,000	(WA taxable wages − deductible amount) × 5.5%
$7,500,000 or more	WA taxable wages × 5.5%

Before 1 July 2023, very large employers paid 6% on wages between $100 million and $1.5 billion, and 6.5% above that. Those tiers are gone.

How is WA payroll tax calculated?

For a single WA employer with wages between $1 million and $7.5 million, take wages minus the deductible amount, then multiply by 5.5%. The deductible amount is:

Deductible amount = $1,000,000 − [(annual wages − $1,000,000) × 2/13]

The 2/13 is the "tapering value": $1 million divided by the $6.5 million gap between the two thresholds. You lose $2 of deduction for every $13 of wages over $1 million. That's why there's no cliff at $1 million. Tax starts at zero and rises smoothly to the full 5.5% at $7.5 million.

A shortcut that gives the same answer: inside the band, payroll tax = 5.5% × (wages − $1,000,000) × 15/13. So every extra dollar of wages in that band costs about 6.35 cents in payroll tax, more than the headline 5.5%. That matters when you're budgeting a new hire.

WA payroll tax calculator and table

Enter your annual WA taxable wages for an estimate. The table below gives the same results for common payroll sizes.

WA payroll tax by annual wages, 2026-27 (Jobs In Perth calculation; single WA employer, no interstate wages, not grouped)
Annual WA taxable wages	Deductible amount	Payroll tax payable	Effective rate
$900,000	n/a	$0	0.00%
$1,000,000	n/a	$0	0.00%
$1,100,000	$984,615	$6,346	0.58%
$1,200,000	$969,231	$12,692	1.06%
$1,500,000	$923,077	$31,731	2.12%
$2,000,000	$846,154	$63,462	3.17%
$2,500,000	$769,231	$95,192	3.81%
$3,000,000	$692,308	$126,923	4.23%
$4,000,000	$538,462	$190,385	4.76%
$5,000,000	$384,615	$253,846	5.08%
$6,000,000	$230,769	$317,308	5.29%
$7,000,000	$76,923	$380,769	5.44%
$7,500,000	$0	$412,500	5.50%
$10,000,000	$0	$550,000	5.50%

Deductible amounts are rounded to the nearest dollar, as in RevenueWA's examples. The $1.2 million row matches RevenueWA's worked example ($12,692.30). If you're grouped or pay wages in other states, use the formulas in the interstate section below.

Worked examples: three Perth payroll sizes

1. A Perth café with $900,000 in wages. Annual payroll tax is nil. But if a busy month (say December, with bonuses) pushes that month's wages over $83,333, the business must register within 7 days after the month ends. The annual reconciliation then works out liability on the full year, which is nil at or under $1 million.

2. A Perth building company with $1,500,000 in wages, all in WA.

Deductible amount: $1,000,000 − ($500,000 × 2/13) = $1,000,000 − $76,923 = $923,077
Taxable amount: $1,500,000 − $923,077 = $576,923
Payroll tax: $576,923 × 5.5% = $31,730.77, an effective rate of 2.1%

3. A Perth-based firm with $4,000,000 in Australian wages: $3,000,000 in WA and $1,000,000 in other states. The deductible amount is calculated on Australian wages, then apportioned by the WA share.

Full deductible amount: $1,000,000 − ($3,000,000 × 2/13) = $538,462
WA share: $538,462 × ($3,000,000 ÷ $4,000,000) = $403,847
WA payroll tax: ($3,000,000 − $403,847) × 5.5% = $142,788.42
The other $1,000,000 is taxed under the other state's rules

What counts as wages for WA payroll tax?

Taxable wages are much wider than salary. They include:

salaries, wages, commissions, bonuses and allowances (some motor vehicle and accommodation allowances are exempt up to set limits)
directors' fees and other remuneration paid to directors
all pre-tax superannuation contributions, including compulsory super and salary sacrifice
fringe benefits, valued at the FBT taxable value grossed up at the type 2 rate
termination payments, including payouts of accrued annual and long service leave and pay in lieu of notice. Genuine redundancy payments are exempt to the extent they're exempt from income tax (see our WA redundancy pay guide)
employee share and option acquisitions
payments by an employment agency to the workers it places (the agency is treated as the employer)

Contractors: WA's Act has no separate "relevant contract" provisions. RevenueWA says WA has not harmonised with other states on contractors. A contractor's payments are taxable if, looking at the whole relationship, the person is really an employee at common law: control, integration, whether they run their own business, and whether they can delegate the work. If they are, all payments to them (excluding GST) are wages. RevenueWA will make a determination if you send form FPRT6. Getting the contract right helps; see our WA employment contract template.

Which wages are exempt from payroll tax?

The main exemptions for small and medium WA employers are:

Apprentices under a registered training contract for a class A or B qualification. Their wages are exempt for the length of the contract, but not while the contract is suspended.
Trainees are not exempt if their training contract was registered from 1 July 2019.
Paid parental leave, up to 14 weeks at full pay (or the equivalent, such as 28 weeks at half pay).
Workers' compensation paid under the WA Act. Make-up pay above that is taxable.
New employees with a disability hired on or after 1 July 2012, for their first 2 years, where the employer gets a disability wage subsidy.
Wages paid while an employee volunteers as a firefighter, SES or Volunteer Marine Rescue member, or serves in the Defence Force.
Remote-area FIFO transport and accommodation, and some remote-area housing benefits.

Charities, non-profit schools, local governments and state government departments have their own exemptions. Charities must apply.

When do you register and lodge payroll tax returns?

Register through RevenueWA's Revenue Online within 7 days after the end of the first month in which your total Australian wages (or your group's) exceed $83,333. After that:

WA payroll tax return frequency and due dates
Annual estimated payroll tax	Return frequency	Due
$150,000 or more	Monthly	7th of the following month
Under $150,000	Quarterly (on request)	7 days after the quarter ends
Under $20,000	Annually (on request)	21 July

Monthly returns must be lodged even if no tax is payable. Payment is due on the same day as the return. The June return and the annual reconciliation, where you square up estimates against actual wages, are due by 21 July. Late payment can attract penalty tax. If you stop employing in WA or your wages fall below the threshold, cancel your registration in Revenue Online.

This is general information, not tax advice. Check your own position with RevenueWA or your accountant.

Hiring in Perth?

Payroll tax is one line in the true cost of a new hire. Advertising doesn't need to be another big one. Post a job on Jobs In Perth from $29 (see pricing), or read our guides on how to find employees in Perth, what job ads cost in Australia, free job posting sites and the WA minimum wage.

Frequently asked questions

What is the payroll tax threshold in WA?

$1,000,000 a year of total Australian taxable wages, or $83,333 a month. It has applied since 1 July 2020 and is unchanged for 2026-27.

What is the WA payroll tax rate for 2026-27?

5.5% of WA taxable wages. Employers with Australian wages between $1 million and $7.5 million subtract a deductible amount first. At $7.5 million or more, there's no deduction.

How do I calculate payroll tax in WA?

If wages are between $1 million and $7.5 million, the deductible amount is $1,000,000 minus 2/13 of wages over $1 million. Subtract it from WA wages and multiply by 5.5%. For $1.2 million in wages, that's $12,692.30.

Is superannuation included in WA payroll tax?

Yes. All pre-tax super contributions are taxable wages, including compulsory super and salary-sacrificed contributions.

Are apprentices and trainees exempt from payroll tax in WA?

Apprentices on registered class A or B training contracts are exempt. Trainees whose contracts were registered from 1 July 2019 are not.

Do contractors count for WA payroll tax?

Only if they're really employees under the common-law tests. WA has no separate relevant contract provisions. Employment agencies pay tax on wages paid to the workers they place.