Payroll tax is a state-based tax in Australia, and in South Australia, it is managed by RevenueSA. It applies when the total wages you pay to employees across Australia exceed the annual threshold. Although payroll tax rules were harmonised across the country in 2007, each state and territory still manages its own system, and there are important differences. This means employers must always check South Australia’s specific rules and updates to stay compliant and avoid penalties.
Payroll tax is charged on taxable wages paid to employees and is the responsibility of the employer. It is a self-assessed tax, which means you are required to calculate your liability, lodge returns, and pay the tax yourself. Because of this, it’s essential to be across the right information, thresholds, and rulings that apply in South Australia so you can meet your obligations and avoid costly mistakes.
Payroll tax can be complicated, but missing a step can cost your business thousands. Here’s a clear guide to South Australia’s rules, thresholds, and lodgement requirements so you can 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)
- Payroll Tax in Queensland (QLD)
Who Needs to Register?
Payroll tax in South Australia is a state-based tax managed by RevenueSA. It applies to wages paid to employees when your total Australian taxable wages (not just those in SA) go over the state threshold.
You must register for payroll tax in South Australia if:
- Your total Australian-wide wages are above the SA payroll tax threshold, and
- You pay wages to employees in South Australia.
If you are part of a group of businesses, the group’s combined Australian wages are counted. This means even if one group member in SA pays below the threshold, registration is still required if the group as a whole exceeds it.
If you have employees who work only in South Australia, you must declare all of their wages in South Australia. If you have employees who work across multiple states or overseas, you should use the Nexus Provisions to determine which state or territory their wages need to be declared in.
The South Australian Threshold
- Annual threshold: $1.5 million ($1,500,000)
- Monthly threshold: $125,000 (adjusted depending on the number of days in the month)
- Weekly threshold: $28,846
When to Register
If your wages exceed the threshold in any month, you must register within 7 days. RevenueSA also recommends registering if your wages consistently approach or exceed the threshold to avoid penalties.
How to Register
You need to register through RevenueSA Online, which is the official system for payroll tax in SA. The process has two steps:
- Register as a RevenueSA Online user - RevenueSA Online
- Register your organisation for the payroll tax component.
Once registered, you can lodge, pay, and adjust your monthly and annual returns online.
Payroll Tax Rates in South Australia
South Australia applies a progressive payroll tax rate. This means smaller employers pay proportionally less than larger employers.
- Employers or groups with total annual taxable wages up to $1.5 million are exempt from payroll tax.
- Employers with taxable wages above $1.5 million but below $1.7 million pay a gradually increasing rate, up to the full rate, which is 4.95%.
- Employers with taxable wages over $1.7 million pay a flat rate of 4.95% on all taxable wages.
Determining the Tax Rate
- The rate is based on total Australian wages, including all group members if applicable.
- Since the exact rate can only be finalised after the annual reconciliation in July, RevenueSA uses an estimated rate for monthly payments, calculated from your expected annual wages.
- Any difference between the estimated and actual tax is adjusted during the annual reconciliation:
- Refunds are given if the estimated tax was higher than the actual.
- Shortfalls must be paid if the estimated tax was lower than the actual.
- If you employ staff for part of the financial year, your wages for that period are annualised to determine the correct payroll tax rate.
- Businesses are encouraged to review their estimated wages throughout the year to avoid underpayment at reconciliation.
Deduction
Unlike some other states, the deduction in South Australia is not the same as the threshold.
- Annual deduction: $600,000
- Monthly deduction: $50,000
Payroll tax is only applied after the deduction is subtracted from taxable wages.
How the deduction is calculated
- Employing only in South Australia
- Full financial year: Full deduction of $600,000 can be claimed ($50,000 per month).
- Part of the year: Deduction is proportionate to the number of days employed in South Australia.
- Employing in South Australia and interstate
- Full financial year: Deduction is proportionate to the share of South Australian wages compared to total Australian wages.
- Part of the year: Deduction is proportionate to both the number of days employed in South Australia and the share of SA wages compared to total Australian wages.
Payroll Tax Return Due Dates
If you report payroll tax every month in South Australia, your return and payment are generally due by the 7th day of the following month. For example, the return for January must be lodged and paid by 7 February. If the 7th falls on a weekend or public holiday, the deadline is automatically extended to the next business day. RevenueSA may also provide additional time around the Christmas and New Year period to accommodate businesses that close during this time.
It is also important to remember that if you lodge your return on or after the due date, your direct debit authorisation must be completed on the same day to ensure payment is processed.
For the 2025–26 financial year, the key monthly due dates are:
- July 2025 – Thursday 7 August 2025
- August 2025 – Monday 8 September 2025
- September 2025 – Tuesday 7 October 2025
- October 2025 – Friday 7 November 2025
- November 2025 – Monday 8 December 2025
- December 2025 – Wednesday 14 January 2026
- January 2026 – Monday 9 February 2026
- February 2026 – Tuesday 10 March 2026
- March 2026 – Tuesday 7 April 2026
- April 2026 – Thursday 7 May 2026
- May 2026 – Tuesday 9 June 2026
Annual Reconciliation
In addition to monthly returns, all registered employers must also lodge an annual reconciliation at the end of each financial year. This process is designed to:
- Review the payroll tax paid during the year and compare it with actual liabilities.
- Correct any overpayments or underpayments that may have occurred.
- Confirm the employer’s registration status with RevenueSA.
- Ensure all wage components, including June wages and tax, are included in the total.
- Report details of all taxable wages, the different components that make them up, and any interstate wages if applicable.
RevenueSA provides information about the reconciliation process to employers each June to help them prepare and submit correctly. For the 2025–26 financial year, the annual reconciliation return is due on Tuesday, 28 July 2026.
Taxable Wages in South Australia
For payroll tax purposes, taxable wages are payments made to employees that are connected to South Australia, even if the payment is made in another state or country. Wages are generally taxable if they are:
- Paid in SA for services performed wholly or partly in the state.
- Paid in SA for services performed outside Australia, where the employee has worked in SA in the past 6 months.
- Paid outside SA but relates entirely to services performed in SA.
- Paid outside Australia for services performed mainly in SA.
- Not specifically exempt under the Payroll Tax Act 2009.
What Counts as “Wages”?
The definition of wages is broad and goes beyond salaries. It includes:
- Salaries and ordinary wages
- Bonuses, commissions, and allowances
- Termination payments and accrued leave on termination
- Fringe benefits
- Shares, options, and other employee share scheme benefits
- Employer-funded superannuation contributions (including salary sacrifice)
- Directors’ fees and payments to company officers or board members
This list is not exhaustive. Follow this link to know in detail about the taxable, non-taxable wages and exempt component of payments for payroll tax in SA - Wages | RevenueSA
Groups of Employers
For payroll tax purposes, related or connected businesses may be treated as a group. This means their wages are combined when working out payroll tax liability.
- When Are Employers Grouped?
Employers can be grouped if:
- They are related bodies corporate under the Corporations Act 2001.
- They share common employees between businesses.
- A person (or people) holds a controlling interest in at least two businesses.
- Tracing provisions apply, where direct or indirect control is established.
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Why Do Grouping Provisions Exist?
Grouping rules stop businesses from reducing payroll tax by splitting wages across multiple entities. When grouped, the combined wages of all members are used to determine liability, and only one employer in the group can claim the deduction. -
Deduction Entitlement
- A group is entitled to a $600,000 annual deduction (not per member).
- The deduction is claimed by the Designated Group Employer (DGE).
- If the group operates across states, the deduction is apportioned based on the share of wages paid in South Australia.
- Any unused deduction can be reallocated to group members during the annual reconciliation, but it cannot be carried over to another year.
- Any unused deduction can be reallocated to group members during the annual reconciliation, but it cannot be carried over to another year.
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Designated Group Employer (DGE)
- The nominated group member who claims the group’s deduction.
- Must employ in South Australia (but can also employ in other states).
- If no member is nominated, the Commissioner will designate one.
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Grouped Employer (GE)
- Other members of the group.
- Cannot directly claim the deduction, but may receive part of it if the DGE does not use the full amount.
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Registration and Lodgement
- Each SA-based group member must register if the group’s total Australian wages exceed $1.5 million.
- Group members outside South Australia do not need to register.
- All registered members must lodge returns, either monthly or annually.
- For annual reconciliation, the DGE should lodge first so that any unused deduction can be allocated to the other members.
Contractors and Payroll Tax
Payments to contractors can sometimes be treated as taxable wages for payroll tax purposes. This usually happens when:
- The contractor is mainly providing labour services, and
- The contractor works exclusively or primarily for one business (the principal).
The term “contractor” is broad and covers sub-contractors, consultants, and outworkers. It does not matter whether the contractor is operating as a sole trader, through a company, trust, or partnership; the rules can still apply.
In practice, most contracts for work are captured under these provisions to ensure payroll tax is not avoided by labelling employees as “contractors.” However, there are a number of specific exemptions, and if any one of these applies, the payments under that contract will not be taxable.
For more detailed information on how contractor payments are treated for payroll tax in South Australia, refer to the RevenueSA Contractors.
Quick Summary
- Annual Threshold: $1,500,000
- Monthly Threshold: $125,000
- Weekly Threshold: $28,846
- Annual Deduction: $600,000
- Monthly Deduction: $50,000
- Flat Payroll Tax Rate: 4.95% (above $1.7M))
- Monthly Return Due Date: 7th of the following month (in general)
- Annual Reconciliation Due Date: 28 July
Conclusion
Payroll tax in South Australia is a self-assessed responsibility that requires employers to stay informed about thresholds, deductions, rates, and grouping rules. Employers must register once the threshold is met, comply with monthly and annual lodgement requirements, understand grouping obligations, and ensure all eligible exemptions and rebates are applied correctly. By carefully managing payroll, monitoring wages (including interstate wages), and staying aware of state-specific rules, businesses can remain compliant, avoid costly penalties, and streamline their payroll process. With the right systems and knowledge in place, payroll tax compliance becomes a straightforward part of running your business.
