ACT payroll tax threshold has dropped to $1.75 million: why growing employers should check their wages now

Payroll tax is a state tax, and the rules change from one jurisdiction to the next. This year the Australian Capital Territory went the opposite way to most: it lowered its tax free threshold, which pulls more growing businesses into the net.

What changed

The ACT Revenue Office says that from 1 July 2026 the monthly payroll tax threshold is $145,833.33, which is $1.75 million a year. Before that date it was $166,666.66 a month, or $2 million a year. The ACT's 2026 determination also resets the wage brackets and rates, and the surcharge that used to apply to larger employers has been folded into the general rate.

Who needs to pay attention

The test is not just the wages you pay in the ACT. The ACT Revenue Office says that if you pay taxable wages in the ACT and your Australia wide monthly wages, or those of your group, go over the monthly threshold, you have to register. The deadline is tight: you must apply within 7 days after the end of the month in which you went over.

Group rules matter too. Businesses that are related can be grouped, and the ACT says an ordinary group employer cannot claim the threshold, so tax is calculated on its ACT taxable wages at the relevant rate. In practice, if you run more than one entity with common ownership, add the wages together before you decide you are under the line.

What to do

• Add up your wages. Work out your Australia wide monthly wages, including any related businesses, and compare them with the new monthly figure.
• Watch the trend. If you are close, a busy Christmas period, bonuses or new hires could tip a single month over the line.
• Register on time. If you cross the threshold, use the ACT Online Payroll Tax Registration form within 7 days of the month end.
• Diarise your returns. The ACT says monthly returns are generally due by the 7th of the following month, and the December return is due by 14 January. June wages go into the annual reconciliation due 28 July.
• Check your workers. The ACT publishes circulars on contractor classification, so look at those if you use contractors with ABNs.

If you only employ in other states, your own state or territory revenue office sets the threshold, so check its current figures. Not sure whether your group is over the line? Your accountant can run the numbers before a late registration becomes an expensive surprise.