Payroll tax in Queensland is a self-assessed tax that employers must pay if their total Australian taxable wages exceed the state’s threshold. It is administered by the Queensland Revenue Office, and employers are responsible for registering, calculating, lodging returns, and making payments themselves.

The tax is based on the total wages paid to employees, and the applicable rate depends on the size of the wage bill and whether the employer qualifies for regional concessions or is subject to additional levies.

In 2007, payroll tax rules were partly harmonised across Australia, so many rulings are consistent between states. However, because each state and territory administers payroll tax separately, there are still important differences. Employers must always check the specific rules and updates for the state in which they operate to stay compliant.

Recommended Reads

• Understand Payroll Tax Basics Across Australia
• Payroll Tax in the Australian Capital Territory (ACT)
• Payroll Tax in New South Wales (NSW)
• Payroll Tax in Northern Territory (NT)

Registration Requirements

If you employ people in Queensland and your taxable wages in Australia (including group wages if you are part of a group) go over the threshold, you must register for payroll tax.

You need to register within 7 days of the end of the first month when your wages (or group wages) exceed $25,000 a week, even if your total taxable wages for the year will be under $1.3 million.

If you are a tax agent or business representative, you can register on behalf of a business if you have the right authority.

Employer Types

Before registering, you need to know which type of employer you are. There are three categories:

1. Designated Group Employer (DGE)
   • A DGE is chosen by a group of related businesses.
   • The group’s wages are added together to see if registration is needed.
   • The DGE can claim deductions if the group’s wages are under $10.4 million.
   • The DGE must lodge their own returns, pay payroll tax on their wages, and reconcile the annual mental health levy for the whole group.
2. Group Member
   • A group member’s wages are also combined with the group to check if registration is required.
   • You lodge your own returns and pay payroll tax on your wages.
   • You cannot claim deductions yourself, but you must pay the mental health levy in your returns and share your totals with the DGE before the annual return is submitted.
3. Non-grouped Employer
   • You are not part of a group and are not connected to another business with an ABN.
   • Only your wages are considered for payroll tax and the mental health levy.

What You Need Before Registering

• Your Queensland and interstate taxable wages (up to the most recent month).
  
• The name, ABN, and client number of your DGE if you are in a group.
• Details of all group members (name, ABN, client number, and wage details for the past year) if you are the DGE.

To register, create and log in to a QRO Online account and complete the registration process there - QRO Online.

Payroll Tax Rates in Queensland

• 4.75% if your annual Australian taxable wages are $6.5 million or less.
• 4.95% if your annual Australian taxable wages are more than $6.5 million.
• Regional employers get a 1% discount on the rate until 30 June 2030.
  
  

Regional Employer Discount

The discount applies to employers principally located in designated regional areas, provided that at least 85% of their taxable wages are paid to regional employees. 

This incentive reduces the applicable rate to 3.75% for Australian taxable wages equal to or less than $6.5million and 3.95% for taxable wages more than $6.5 million. 

This regional discount is not available for employers who pay more than $350 million annually.

Payroll Tax Threshold

• The current threshold is $1.3 million in annual Australian taxable wages.
• If your wages are $1.3 million or less, you may not need to pay payroll tax, but you may still need to register.
• For employer groups, the $1.3 million threshold applies to the group’s combined wages.
• If you employ for only part of the financial year, the threshold is adjusted based on the number of days you paid wages.
  
  

Mental Health Levy

The mental health levy is an extra charge on top of payroll tax and is unique to payroll tax in Queensland. The Queensland Government introduced it to help fund mental health services across the state. It applies only to larger employers.

The levy is worked out based on your total Australian taxable wages (Queensland + interstate wages) and applied proportionately to your Queensland wages that exceed the thresholds:

• Up to $10 million → No levy.
• More than $10 million (primary threshold) → 0.25% levy.
• More than $100 million (additional threshold) → 0.25% levy + extra 0.5% levy.
  
  

Adjustments

Your levy thresholds may change if you:

• Are part of a group
• Pay interstate wages
• Only employ for part of the year
• Lodge monthly or half-yearly returns.

These adjustments are done automatically when you lodge through QRO Online. If your levy calculation comes to zero or a negative amount, you don’t need to pay it.

Taxable Wages and Inclusions

Payroll tax in Queensland applies to a broad range of payments to employees :

• Gross wages/salaries
• Superannuation contributions
• Bonuses
• Commissions
• Directors’ fees
• Termination payments
• Fringe benefits*
• Allowances*
• Contractor payments*

Employers must ensure all taxable components are accurately reported to avoid underpayment and penalties. For detailed information on which payments are considered taxable, non-taxable, or exempt from payroll tax in Queensland, please refer to the official Queensland Revenue Office guidance - Taxable wages for payroll tax - Queensland Revenue Office.

Taxable under certain conditions*

Payroll Tax Returns

Employers must lodge periodic payroll tax returns throughout the year and an annual return at the end of the financial year. You may also need to lodge a final return if your status changes (e.g., business closes, stops employing, or changes group arrangements)

• Periodic Returns

• • A periodic return reports taxable wages paid during the return period.
  • Most employers lodge monthly, while some approved employers lodge half-yearly.
  • You must lodge a periodic return even if no tax is payable.
  • Your notice of registration tells you your lodgement frequency and when to start lodging.
  • For periodic returns, you don’t need to provide a full wage breakdown; that’s only required in the annual return, final return, or if requested.
    
    

• Monthly Lodgers

• • Lodge 11 periodic returns (July–May).
  • Lodge 1 annual return in July (which also covers June wages).
    
    

• Half-yearly Lodgers

• • Lodge 1 periodic return (July–December).
  • Lodge 1 annual return in July (which also covers January–June wages).
    
    

Lodgement Frequency Rules

Below are the general frequencies depending on your annual tax liability.

• Monthly: if your tax liability is $80,000 or more.
• Half-yearly: if your liability is less than $80,000.
• Annually: if your liability is nil.

Your lodgement frequency is reviewed after each annual return. You can request a change earlier, but you must keep lodging at your current frequency until the Queensland Revenue Office confirms the change.

Annual Returns

At the end of the financial year, you must:

• Lodge an annual return for all taxable wages paid during the year.
• Reconcile your periodic returns with your total annual liability.
• Pay any outstanding tax (annual liability) by the due date.

Important notes:

• You can’t lodge your annual return until all periodic returns are submitted.
• No separate June return is required; include June wages in the annual return.
• If you lodged a final return earlier in the year, only include wages paid after that final return period.
• If your status changes on 1 July, just note it in the annual return; no final return is needed.
  
  

Record Keeping and Refunds

• Keep copies of all annual returns and supporting documents for at least 5 years.
• If you overpay payroll tax, the extra amount will first be applied to any other outstanding liabilities, and any remaining balance will be refunded to you.

Click here to know further about lodging returns and payments - Lodging and paying payroll tax returns - Queensland Revenue Office

Payroll Tax Groups

Businesses can be treated as one unit for payroll tax. This is called grouping.

When Grouping Applies

You may be grouped if:

• Your company and another are related bodies corporate.

• Employees work across multiple businesses.

• The same people control two or more businesses.

• A business has a tracing interest in companies.

• A person belongs to two or more groups (merged groups).

Note that only one condition is enough for grouping.

What Grouping Means

• The combined Australian taxable wages of all group members are counted to work out the payroll tax liability.

• If a group must register, one member is nominated as the Designated Group Employer (DGE).

• Each member lodges their own returns, but:

  • The DGE claims any deduction on behalf of the group.

  • All group members are jointly responsible for unpaid tax, penalties, or interest.

You are not grouped if you are a single business with one ABN, even if you employ in multiple states. In that case, you just declare your Queensland taxable wages separately from your Australian wages.

Payroll Tax Deductions

A deduction reduces the amount of payroll tax you need to pay.

Deduction Rules

• You may claim a deduction if your annual Australian taxable wages are less than $10.4 million.

• The maximum deduction is $1.3 million in wages (or $108,333 per month).

• The deduction reduces by $1 for every $7 of taxable wages above $1.3 million.

• No deduction applies once wages reach $10.4 million annually (or $866,666 monthly).
  
  

Groups and Deductions

• Only the DGE can claim the deduction for the group.

• If the group deduction is bigger than the DGE’s wages, the excess can be given to another registered group member.

• The excess deduction is applied in full to one member at a time until it’s used up.
  
  

Adjustments

• If your wages change during the year, your deduction changes too.

• If you don’t employ for the full financial year, the deduction is adjusted proportionally.

Conclusion

Managing payroll tax in Queensland is more than just applying a percentage to employee wages. Employers need to understand how the rules on registration, grouping, deductions, levies, and reporting work in practice. Each of these areas affects when you need to register, how much tax you pay, and what returns you must lodge.

It’s important to keep an eye on your total Australian wages each month and act quickly once you cross the threshold. Make sure you register on time, lodge accurate returns, and claim any deductions or regional discounts you are entitled to. Using payroll software, regularly checking updates from the Queensland Revenue Office, and getting advice from tax professionals can make the process much easier. These steps not only help you stay compliant but also protect your business from penalties and unnecessary stress.