When your practice grows, so do your responsibilities. Payroll Tax is a self-assessed tax. For Queensland employers, payroll tax is a key area where understanding the rules can save you both time and money. From knowing the point at which you must register, to calculating taxable wages and applying the right deductions, being proactive ensures your practice stays compliant.
Who needs to register for Payroll Tax?
In Queensland, employers must register for payroll tax within 7 days after the end of the month in which Australian taxable wages exceed $25,000 per week.
This means if your total Australia-wide wages exceed this limit including salaries, superannuation contributions, allowances, fringe benefits, and certain contractor payments, you’re required to register for payroll tax with the Queensland Revenue Office (QRO).
It’s worth noting that the threshold applies to all grouped entities. If your practice is part of a group (for example, multiple companies under common control), the threshold is shared across the group rather than per entity.
How payroll tax is calculated
Once registered, payroll tax is applied to your Queensland taxable wages at the applicable rate.
- For most employers, the rate is 4.75%.
- For larger employers (those with Australian taxable wages over $6.5million) the rate increases to 4.95%.
Your payroll tax liability is then offset by a deduction amount, which reduces gradually as total wages increase between the lower threshold ($1.3 million) and the upper limit ($10.4 million).
The GP exemption
After a long-awaited public ruling earlier this year GPs, whether contracted or employed, are exempt from payroll tax in Queensland from 1 December 2024. It’s a landmark decision that finally gives practices the clarity they’ve been hoping for and sets a strong precedent for other states to follow.
Even with this welcome change, it’s still important to stay on top of your payroll tax obligations. Registration and reporting requirements remain in place and knowing how the exemption applies to your practice will help you avoid any surprises down the track.
Monthly returns and payment obligations
Payroll tax is reported and paid monthly, with returns generally due seven days after the end of each month.
With data-matching via Single Touch Payroll, the QRO is monitoring payroll tax compliance in real time. Businesses exceeding the registration threshold can expect a notice from QRO.
Record keeping
Accurate record keeping is a vital part of managing your payroll tax obligations. When you self-assess your liability, you’re responsible for maintaining clear and accessible records that can be produced if requested by the QRO.
To meet your obligations, you must keep all payroll tax records for at least five years.
Having well-organised records not only supports compliance but also makes future audits and reconciliations far less stressful.
Why it matters
Payroll tax compliance can be complex, particularly when your business operates across multiple states or employs contractors. Misclassifying payments or overlooking grouped wages can easily result in underpayments, penalties, or interest.
Our recommendation is to contact QRO before QRO contact you. If you have overlooked reporting historically or misunderstood the grouping rules; focus on rectifying this sooner rather than later.
At Cutcher & Neale, we help practices navigate these obligations confidently, from assessing grouping risks, assisting with registration to lodging monthly returns and claiming the eligible deduction.
Nicole Brown has more than 23 years of experience in accounting and financial services, specialising in medical professionals and niche industries. Personalised, client-focused, and trusted, she builds strong client relationships, offers clear guidance, and ensures strategies align with long-term financial objectives.
