NSW Payroll Tax Threshold and Registration Rules (2025-26)

General information only. This is not tax or financial advice.

If you are searching for the NSW payroll tax threshold for 2025-26, the first answer is straightforward:

• annual NSW payroll tax threshold: $1,200,000
• payroll tax rate: 5.45%

But the practical decision for employers is usually harder than that. The real question is whether you get the full threshold, whether you must register during the year, and how interstate wages change the result.

The core rule

Revenue NSW says payroll tax applies if:

• you pay taxable wages in NSW, and
• your total Australian wages exceed the relevant threshold

The 2025-26 annual threshold is $1.2 million and the NSW payroll tax rate remains 5.45%.

Monthly registration thresholds for 2025-26

Registration is not only an end-of-year issue. Revenue NSW also publishes monthly thresholds that can trigger registration if your wages go over them during a month.

For 2025-26, the monthly thresholds are:

That matters if your wages spike during the year even though you started below the annual threshold.

When you do not get the full threshold

Many employers miss this point: the full NSW threshold is not automatic.

Your threshold may be reduced if:

• you pay wages in more than one Australian state or territory
• you only paid wages for part of the financial year
• grouping rules apply across related entities

For interstate employers, Revenue NSW calculates the threshold based on the NSW share of total Australian wages.

Why interstate wages matter so much

The threshold is based on all Australian wages, not just NSW wages.

That means a business with:

• $900,000 NSW wages
• $2,100,000 wages in other states

does not keep the full $1.2 million NSW threshold. Its NSW threshold is reduced proportionally.

This is where many employers underestimate payroll tax exposure.

The decision employers actually need to make

If your question is “do I owe NSW payroll tax?”, work in this order:

1. Check total Australian wages, not just NSW wages.
2. Check whether any month crossed the registration threshold.
3. Check whether interstate wages or part-year employment reduce your threshold.
4. Then calculate the actual NSW liability.

That sequence matters because an employer can be wrong even when NSW wages alone look “under the threshold”.

Use the calculator when the threshold is no longer simple

If you have:

• interstate wages
• only part-year NSW wages
• a fast-growing wage bill

move straight to the NSW Payroll Tax Calculator. It is the faster way to test how much of the threshold you really get.

Sources

• Revenue NSW: Payroll tax thresholds and rates
• Revenue NSW: Register for payroll tax

Next step

If your question is not just “what is the NSW payroll tax threshold?” but “how much threshold do I really get?”, use the NSW Payroll Tax Calculator and test the interstate or part-year case directly.