Interstate wages

Payroll tax and interstate wages: how the threshold is shared

If you pay wages in more than one state, each state gives you only a share of its threshold. Here is the rule, every official example, and a four-state worked case.

Interstate wages are wages that are taxable under the payroll tax law of another state or territory.[1] Every state counts them, because every threshold is tested against your total Australian wages and then shared by the part of those wages paid in that state. Interstate wages must be declared in each state's returns even when you are under that state's threshold.[1]

The rule in every state

Your share of a state's threshold = the state's threshold × wages paid in that state ÷ total Australian wages, and × days you paid wages ÷ days in the year for a part year.[2],[3] On top of that, some states reduce the threshold itself as total wages grow, before sharing it:

  • Victoria: phased out at 50% from $3m, nil from $5m (both scaled by days for a part year).[4],[5]
  • Queensland: $1 less for every $7 above $1.3m, nil at $10.4m.[6]
  • Western Australia: $2 less for every $13 above $1m, nil at $7.5m.[7]
  • Northern Territory: $1 less for every $2 above $2.5m, nil at $7.5m.[8]

Tasmania shares both of its thresholds ($1.25m and $2m),[9] and South Australia shares its $600,000 deduction while its rate depends on total wages.[10]

Official examples, recalculated

NSW wages $900,000, Queensland and Victorian wages $2,100,000: threshold $360,000[2]

threshold / deduction: official $360,000 · our calculator $360,000

NSW $1,000,000, QLD $2,000,000: threshold $400,000[1]

threshold / deduction: official $400,000 · our calculator $400,000

NSW $1,000,000 + VIC/QLD $2,000,000, all paid for 184 days: threshold $201,643.84[2]

threshold / deduction: official $201,643.84 · our calculator $201,643.84

2024-25 rules: Victorian $1.5m + interstate $2m, 335 of 365 days: threshold $210,030[4]

threshold / deduction: official $210,030 · our calculator $210,029 (the office rounds each step)

Queensland $1,356,789 of Australian $1,789,776: annual deduction $932,460[11]

threshold / deduction: official $932,460 · our calculator $932,460

WA $1,000,000 + SA $3,000,000: deductable amount $134,616, tax $47,596.12[12]

threshold / deduction: official $134,616 · our calculator $134,615 (the office rounds each step)
payroll tax: official $47,596.12 · our calculator $47,596.15 (the office rounds each step)

SA $700,000 of Australia-wide $2.1m: deduction $200,000[3]

threshold / deduction: official $200,000 · our calculator $200,000

Tasmania $2.4m of Australian $3m, full year: $72,800[13]

payroll tax: official $72,800 · our calculator $72,800

The Victorian example uses the 2024-25 rules ($900,000, 45%); our calculator gives the same figure with those rules.

One payroll across four states

A business that is not grouped pays $4.5 million of wages for the whole of 2026-27: our calculator applies each state's formula. Note how Victoria, Queensland and WA give less than their share of the full threshold, because total wages of $4.5 million are inside their taper ranges.

StateWagesShareThreshold usedPayroll tax
NSW$1,800,00040.0%$480,000$71,940
VIC$1,200,00026.7%$66,667$54,967
QLD$900,00020.0%$168,571$34,743
WA$600,00013.3%$61,538$29,615
Total$4,500,000$191,265

Open this example in the calculator

Which state taxes an employee who works in several states?

The harmonised nexus rules decide where each month's wages are taxable. If the employee works only in one state, it is that state. Otherwise the tests apply in order: where the employee is based (principal place of residence); if not based in Australia, where the employer is based; then where the wages are paid; and finally where the services are mainly performed.[13],[14] RevenueSA has a page on the same rules.[15]

Common questions

Questions people in Australia search for, answered from the official sources.

What are interstate wages for payroll tax?

Wages that are taxable under the payroll tax law of another state or territory. You declare them in each state's returns so that the state can work out your share of its threshold.[1]

Which state taxes an employee who works in more than one state?

The nexus rules decide it, month by month: first where the employee is based (principal place of residence), then where the employer is based, then where the wages are paid, then where the services are mainly performed.[13],[14]

Guides

Sources

  1. Payroll tax and interstate wages · Revenue NSW. checked 11 November 2026
  2. Payroll tax thresholds and rates · Revenue NSW. checked 11 November 2026; page says “Last updated: 01 July 2026”
  3. How is payroll tax calculated? · RevenueSA. checked 11 November 2026
  4. Threshold and phase-out rate · State Revenue Office Victoria. checked 11 November 2026; page says “Updated: 22 October 2026”
  5. Payroll Tax Act 2007 (Vic), authorised version 041, Schedule 1 cl 1, 1A, 5 and 7A · Victorian Legislation. checked 11 November 2026
  6. Payroll tax deductions · Queensland Revenue Office. checked 11 November 2026; page says “Last updated: 17 September 2025”
  7. Calculation: Payroll Tax Employer Guide · Department of Treasury and Finance (WA). checked 11 November 2026; page says “Last updated: 2 June 2026”
  8. Payroll Tax Act 2009 (NT), as in force at 1 July 2026 · Northern Territory Legislation. checked 11 November 2026
  9. Payroll Tax Act 2008 (Tas), Schedule 1 · Tasmanian Legislation. checked 11 November 2026
  10. Payroll Tax Act 2009 (SA), Schedule 1 · South Australian Legislation. checked 11 November 2026
  11. Worked example image: annual deduction (Q $1,356,789 of A $1,789,776 → $932,460) · Queensland Revenue Office. checked 11 November 2026
  12. Interstate non-group employer: Payroll tax · Department of Treasury and Finance (WA). checked 11 November 2026; page says “Last updated: 2 June 2026”
  13. Annual Adjustment Return Guideline (worked examples) · State Revenue Office of Tasmania. checked 11 November 2026
  14. Payroll Tax Act 2011 (ACT), Schedule 1 and s 9 · ACT Legislation Register. checked 11 November 2026
  15. Nexus provisions · RevenueSA. checked 11 November 2026

Every figure on this page comes from the official pages above. We re-read them with the checks described here; if a page changes, the figure is re-checked before it stays on the site.

General information, not tax advice. Figures and formulas are taken from the official revenue office pages and legislation linked on each page. Payroll tax depends on facts this site cannot check (what counts as wages, exemptions, grouping, contractors). Confirm your liability with the revenue office of each state where you pay wages, or with a registered tax agent.