Is Payroll Tax Payable on Superannuation? Rates and Thresholds

Yes — payroll tax is payable on superannuation in every Australian state and territory. Employer super contributions are included in the definition of wages under the harmonised Payroll Tax Act 2007, so the money you put into a worker’s fund is added to your cash wage bill before payroll tax is worked out.¹ That covers the mandatory Superannuation Guarantee, salary sacrifice arrangements, voluntary top-ups, and super paid for directors and certain contractors. Payroll tax only starts once your total Australian taxable wages (super included) exceed your state’s annual threshold, so many small employers never actually owe anything even though super technically counts.

Which Super Contributions Count as Wages

The statute treats a contribution as wages the moment it is paid or becomes payable, whether the destination is a regulated super fund, a retirement savings account, or an unfunded scheme.¹ Revenue NSW’s practice note confirms the reach: payments to defined benefit funds, lump sums paid for a class of employees, non-monetary contributions where the employer funds the benefit in kind, and super for company directors (working or not) all fall inside the net.²

A superannuation guarantee charge imposed by the ATO when an employer falls behind is itself treated as wages for payroll tax.¹ The penalty component the ATO adds on top of that charge is not.³

Two things fall outside. After-tax contributions the employee makes from their own net pay are not subject to payroll tax.³ And because employer contributions to complying funds are excluded from fringe benefits tax, there is no FBT-plus-payroll-tax double-up on the same payment.⁴

Superannuation Guarantee at 12%

From 1 July 2025, the Superannuation Guarantee rate is 12% of ordinary time earnings.⁵ An employer paying $100,000 in ordinary time earnings contributes $12,000 in super, and the full $112,000 feeds into the payroll tax calculation. Voluntary contributions above 12% — for instance, a 15% super package used as a recruitment incentive — are taxable in the same way. All employer super contributions, mandatory or discretionary, belong in the payroll tax return.²

Salary Sacrifice Does Not Reduce the Bill

When an employee agrees to take a lower cash salary in exchange for extra super, the sacrificed amount is reclassified as an employer contribution. The pre-sacrifice salary is still fully taxable. Revenue NSW’s example: an employee on $130,000 who sacrifices $10,000 to super still generates a $130,000 payroll tax liability, split $120,000 in wages and $10,000 in employer super.⁶ Restructuring the pay packet does not shrink the payroll tax.

Contractor Super and the Exemptions That Remove It

Payroll tax reaches beyond traditional employees. Under the relevant contract provisions, a contractor who provides labour services can be treated as a deemed employee, and any super paid on that contractor’s behalf becomes taxable along with the labour component of the contract.⁷

Several exemptions can take the entire contract outside the payroll tax net. If any one of the following applies, all payments to that contractor (including any super) are exempt:

The contractor ordinarily provides the same services to the general public, not just your business.
The contractor provides services to your business for 90 days or fewer in a financial year.
The services are not ordinarily required by your business and last 180 days or fewer.
The labour is ancillary to the supply of goods the contractor owns, such as a contractor who supplies and installs an air conditioning system.
The contractor is an owner-driver transporting goods in their own vehicle.
The services are performed by two or more people under the contract.

Where no exemption applies, only the labour component is taxable. Materials, tools, equipment, vehicles, and GST are excluded from the calculation.⁷

Thresholds: When You Actually Start Paying

Payroll tax only kicks in once your total Australian taxable wages, super included, exceed your state or territory’s annual threshold. For 2025–26:

New South Wales: $1,200,000
Victoria: $1,000,000
Queensland: $1,300,000
Western Australia: $1,000,000
South Australia: $2,500,000
Tasmania: $1,250,000
ACT: $2,000,000
Northern Territory: $2,500,000

The threshold operates as a deduction, so tax applies only to the amount above it. NSW wages of $1,400,000 mean payroll tax on $200,000. Registration is required within seven days of expecting to exceed the threshold.⁸

Businesses with workers in more than one state register in each and apportion the threshold. Grouping matters too: if one person or set of persons controls two or more businesses, they share a single threshold rather than one each.⁹ Control can arise through majority shareholding, board composition, partnership interests, or trust beneficiary entitlements. Every beneficiary of a discretionary trust is deemed to have a controlling interest, which regularly catches out family business structures.

Rates by State and Territory

Once you cross the threshold, the rate applied to super and other wages depends on where your workers are located. For 2025–26:¹⁰

New South Wales: 5.45%
Victoria: 4.85%, or 1.2125% for regional employers
Queensland: 4.75% on wages up to $6.5 million, 4.95% above that, plus a mental health levy for wages over $10 million
Western Australia: 5.5%
South Australia: graduated from 0% to 4.95%
Tasmania: 4% up to $2 million, 6.1% above $2 million
ACT: 6.85%, with a surcharge for businesses with nationwide wages above $50 million
Northern Territory: 5.5%

Queensland’s regional employer discount of 1% (available until 30 June 2030) and Victoria’s reduced regional rate are worth checking if your workforce sits outside a capital city.

Return Deadlines

Payroll tax is self-assessed. You work out your liability each month, lodge through your state’s online portal, and pay by the due date. Monthly returns in most jurisdictions are due by the 7th of the following month. The ACT follows the same pattern, except the December return, which is due by 14 January.¹¹

An annual reconciliation return is also required after the end of each financial year. It is due 21 July in most states, or 28 July in the ACT, NSW, and South Australia.¹² This is where actual wages are reconciled against monthly estimates. Revenue offices compare the annual figure against other data, including the super contributions you reported to the ATO, so a mismatch shows up.

What It Costs to Leave Super Out

Revenue offices charge interest on unpaid or late payroll tax at a market rate plus an 8% premium. In Victoria that totals 11.78% per annum for 2025–26. Penalty tax can sit on top. Victoria’s penalty is 25% of the underpaid tax for failing to take reasonable care, and 75% for intentional disregard, with reductions available for voluntary disclosure before an investigation (down to 5% for carelessness or 15% for deliberate defaults).¹³ In NSW, a repeat late payer (paying after the due date more than twice in a financial year) faces market-rate interest plus 5% penalty tax.¹⁴

An employer who excludes super from returns understates wages every single period. When an audit picks it up, interest and penalty tax compound across the whole span. Self-disclosing before an investigation starts is consistently cheaper than being found.

1
NSW Legislation. Payroll Tax Act 2007 No 21
2
Revenue NSW. CPN 021 Employer Superannuation Contributions
3
Revenue NSW. Superannuation and Payroll Tax
4
Australian Taxation Office. How Fringe Benefits Tax Works
5
Australian Taxation Office. Super Guarantee
6
Revenue NSW. Salary Sacrifice and Payroll Tax
7
Revenue NSW. Contractors and Payroll Tax
8
Revenue NSW. Payroll Tax
9
Revenue NSW. Common Control and Payroll Tax Grouping
10
Payroll Tax Australia. Resources
11
ACT Revenue Office. Lodging Returns – Payroll Tax
12
Payroll Tax Australia. Lodging
13
State Revenue Office Victoria. Interest and Penalty Tax Rates
14
Revenue NSW. Payroll Tax Interest and Penalty Tax