Payroll tax in Tasmania works similarly to other states, although each has its own rules, rates and thresholds for when you might have to start paying. Understanding your payroll tax obligations is an important part of payroll management.
In this guide, you'll cover everything about Tasmania's payroll tax, including how it works, when and what you might pay and the exemptions available.
What are Tasmania's payroll tax rates and thresholds?
Tasmania's payroll tax rates and thresholds vary. You'll pay:
Nothing, if your taxable wage bill in Australia is lower than $1.25 million a year
4%, if your taxable wage bill is $1.25–2 million a year
6.1%, if your taxable wage bill is over 2 million a year
The other states and territories have different payroll tax rules, rates and thresholds.
How is payroll tax calculated in Tasmania?
Payroll tax is calculated in Tasmania based on wages you've paid or must pay employees. The SRO (State Revenue Office) of Tasmania provides an online tool for calculating how much payroll tax to pay.
When payroll tax is due and how to pay it in Tasmania
Payroll tax is due on the 7th of the month for the previous month's wages. So, for wages paid in March, you'll usually need to pay payroll tax by April 7.
To pay it in Tasmania, you can go online, stop at a service centre, call 1300 729 859, or send a cheque or money order to The Commissioner of State Revenue, GPO Box 1374, Hobart 7001.
Annual reconciliation for Tasmanian businesses
Annual reconciliation by Annual Adjustment Return (AAR), is a must-do for Tasmanian businesses, and it's due by 21 July each year. It helps ensure you haven't under or overpaid your payroll tax. You'll need to confirm how much payroll tax you should have paid throughout the year, compared to what you actually paid.
What is exempt from Tasmania's payroll tax?
Exemptions from Tasmania's payroll tax may include:
Organisations including religious, public benevolent, non-profit or government organisations
Wages paid to an Indigenous Australian in some cases, employees on parental or adoption leave or on leave serving with emergency or defence forces.
Refer to the State Revenue Office for more details on Tasmanian payroll tax exemptions.
Employer groupings for payroll tax in Tasmania
Employer groupings for payroll tax in Tasmania can impact whether you need to pay and how much. If you own or control two or more businesses, these may be grouped together — both wage bills added may bump you over the threshold.
That means if you own two businesses that each pay $700,000 in wages yearly, the combined wage total will be $1.4 million and, as this is over 1.25 million, liable for payroll tax.
Businesses may also be grouped if they share employees or are financially dependent on one another.
State Revenue Office of Tasmania payroll tax compliance activities
State Revenue Office of Tasmania compliance activities aim to ensure that every employer helps fund a range of essential services. To stay compliant, you must understand state payroll tax law so you know what you need to pay and when. Then, ensure you keep detailed records, register, and pay on time.
How to register for payroll tax in Tasmania
To register for payroll tax in Tasmania, log into Tasmanian Revenue Online (TRO), and click the ‘Register’ button under the heading 'register as a new user'. You'll be prompted to enter your details and confirm your email, before being able to login and select ‘new registration’ followed by ‘new payroll account application’ from the drop-down menu.
Penalties associated with late or failed payroll tax payments
Penalties associated with late or failed payroll tax payments are best avoided, with penalties and interest applied depending on the situation.
Estimated assessment
An estimated assessment will be issued if you don't lodge your payroll tax return. If you submit your return late, the TRO will calculate interest owing and you can pay this with your tax.
Penalty tax
Penalty tax is 25% of your unpaid tax balance. If you are found to have disregarded the law on purpose, this penalty can be increased to 75%. It may be further increased if you try to hide information during an investigation into your payroll tax. If you assist in correcting your return, penalties may be reduced by up to 80%. You can see details of penalties and interest charges here.
Tasmania payroll tax FAQs
Do you pay payroll tax on superannuation payments in Tasmania?
Yes, payroll tax is paid on employer contributions to superannuation and on non-monetary superannuation contributions in Tasmania.
Are termination payments exempt from payroll tax in Tasmania?
No, termination payments aren't exempt from payroll tax in Tasmania — they're considered wages for payroll taxation purposes.
Are workers' compensation payments subject to payroll tax in Tasmania?
No, workers' compensation payments are not subject to payroll tax in Tasmania, they're exempt.
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Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.