Case example: Baker Street Pty Ltd


Payroll tax NSW Revenue



  • Please check website for the updated rate

FY2017/18

The payroll tax rate is 5.45%.

The payroll tax threshold for 2017-18 (July – June) is $750,000.

The monthly threshold amounts are:

Days in the monthThreshold
28 days$57,534
30 days$61,644
31 days$63,699

The monthly threshold is calculated using the number of days in the month, divided by the number of days in the year, multiplied by the threshold.

To view rates and thresholds for previous years, visit the rates and thresholds page.




What payments are liable for payroll tax?What payments are not liable?

  • Commonwealth Paid Parental Leave Scheme payments
  • Jury duty payments

Payments made by the court system are not liable. Payments made to an employee by their employer while on jury duty are liable, even if you are partly or fully compensated from the court


  • Reimbursements

If in the course of work an employee incurs an expense and is reimbursed for that expense against receipts, then the payment is not a wage. You must be able to account for the payments either as an advance which is later adjusted against receipts, or payments against receipts. Any payments that do not have documentation are not accepted as reimbursements and will be liable.


  • Workers Compensation

Payments made by an insurance company to an employee on workers compensation are not liable.

Make up payments (the difference between the compensation payments and an employee’s regular pay) paid by the employer are liable.


See extensive list below:





additional items that are not liable, exempt from payroll tax

http://www.osr.nsw.gov.au/taxes/payroll/checklist

Wage typeLiability statusComments
Aboriginal Persons (payments made to)Exempt under certain conditionsWages exempt if an approved project
Accommodation allowancesExempt component applies
Adoption leaveExempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.Paid in addition to normal leave
Defence Force paymentsExemptFor time taken as military leave
DividendsNot liableReturn on investment is not liable
Emergency operationsExemptFor wages paid to a volunteer member involved in emergency operations
Gifts unrelated to serviceNot liableFringe benefits tax limits apply
Jury Duty (court payments)Not liablePayments made by the court system to an employee are not liable wages
Maternity leaveExempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.Paid in addition to normal leave
Motor vehicle allowances paid as flat or fixed amountExempt component appliesApplies to business use of private vehicles
Motor vehicle allowances paid on per kilometre basisNot liableApplies to business use of private vehicles. The car expense payment must be exempt under the Fringe Benefits Tax Assessment Act 1986
Paid parental leave (PPL) paid by the Commonwealth GovernmentNot Liable
Partnership drawingsNot liable
Paternity leaveExempt up to 14 weeks full-time or equivalent period if paid at a reduced rate of pay.Paid in addition to normal leave
Portable long service leave fund paymentsNot liable
Redundancy benefit scheme paymentsNot liablePayments made into or out of scheme
ReimbursementsNot liableMust be a business expense which is accounted for
SubscriptionsExempt component appliesAs per Fringe Benefits Tax Assessment Act 1986
Trust distributionsNot liable
Volunteer fire-fightersExemptFor wages paid while involved in bushfire fighting activities
Workers compensationNot liableOnly statutory compulsory amounts are not liable