Victorian payroll tax for 2026-27 is 4.85% of taxable wages above a $1,000,000 threshold. The threshold phases out between $3 million and $5 million of Australian wages, surcharges of 1% (above $10 million) and 2% (above $100 million) apply, and regional employers pay 1.2125%.
Payroll tax in Victoria is administered by the State Revenue Office (SRO). This page sets out the 2026-27 rates and threshold (from 1 July 2026), how to work out the tax, and when to register, lodge and pay. For every state side by side, see our payroll tax by state guide.
VIC payroll tax rates and threshold 2026-27
| 2026-27 | |
|---|---|
| Rate | 4.85% (regional employers 1.2125%) |
| Annual threshold | $1,000,000, reduced by 50 cents per $1 of Australian wages above $3M, nil above $5M |
| Monthly threshold | $83,333 |
| Surcharges | 1% on Victorian wages when Australian wages exceed $10M; 2% above $100M |
| Monthly returns | Due the 7th of the next month |
| Annual reconciliation | 21 July (no extensions) |
| Online system | PTX Express |
How to calculate VIC payroll tax
Victoria taxes wages above the threshold at 4.85%, but two rules raise the bill for growing employers:
- Threshold phase-out: where Australian wages are between $3 million and $5 million, the $1 million threshold reduces by 50 cents for every dollar above $3 million. Above $5 million there is no threshold.
- Surcharges: the mental health and wellbeing surcharge (0.5%) and the COVID-19 debt temporary surcharge (0.5%) apply to the Victorian share of wages above $10 million of Australian wages, and each rises by a further 0.5% above $100 million. The COVID-19 debt surcharge ends on 30 June 2033.
Example 1: $2,500,000 of wages, all in Melbourne. Wages are under $3 million, so the full threshold applies: ($2,500,000 - $1,000,000) x 4.85% = $72,750.
Example 2: $4,000,000 of wages, all in Victoria. The threshold reduces by ($4,000,000 - $3,000,000) x 50% = $500,000, leaving $500,000. Tax = ($4,000,000 - $500,000) x 4.85% = $169,750.
When you must register
You must register within 7 days after the end of the month in which your Australian wages (or your group's) go above the weekly threshold of $19,230 a week (Payroll Tax Act 2007 (Vic) s 86). Wages paid interstate count towards the test.
Lodging and paying
- Monthly: lodge and pay by the 7th of the next month (or the next business day). A nil return is still needed for months with no tax.
- Annual reconciliation: due 21 July. The SRO does not grant extensions, and penalty tax of up to 25% plus interest can apply to late lodgement.
- Returns are lodged online through PTX Express.
Exemptions and concessions
A regional employer pays 1.2125% instead of 4.85% if at least 85% of its Victorian taxable wages are paid to employees based in regional Victoria. Standard exemptions (for example certain parental leave and charities) also apply.
Interest and penalties
Interest on unpaid tax is 12.43% for 2026-27. Late annual reconciliations can attract penalty tax of up to 25% plus interest, and employers who fail to register can face penalties and interest on the tax they should have paid.
Employers in more than one state, and overseas companies
Payroll tax is charged by each state on the wages paid for work done there, but the threshold tests use your total Australian wages, including those of related companies. Two consequences catch new employers:
- Interstate wages reduce the threshold. If you also pay wages in other states, you claim only the VIC share of the threshold (VIC wages / total Australian wages). You must register in every state where you pay wages once the group passes the threshold, even if you have only one employee there.
- Grouping. Related businesses, such as two Australian subsidiaries of the same overseas parent, are grouped. The group shares one threshold, claimed by the designated group employer.
We register overseas-owned companies for payroll tax in every state, lodge the monthly and annual returns, and run the payroll itself through our payroll service, from $200 a month. If you have no Australian entity yet, our employer of record service (from $500 per employee a month) employs your staff and handles payroll tax for you.
Request a quote
Tell us a bit about your situation. We reply the same business day with a fixed-fee quote.
Frequently asked questions
What is the Victorian payroll tax threshold for 2026-27?
$1,000,000 a year ($83,333 a month). It reduces by 50 cents per dollar of Australian wages above $3 million and is nil above $5 million.
What is the payroll tax rate in Victoria?
4.85%, or 1.2125% for regional employers. Employers with Australian wages above $10 million also pay surcharges of 1%, rising to 2% above $100 million.
When is the Victorian annual reconciliation due?
21 July each year. Extensions are not available.
This content is general information only and is not legal, financial or tax advice. Laws and regulations change often. For advice on your circumstances, speak to a qualified adviser.