Victoria Payroll Tax Calculator 2025-26
Calculate your Victorian payroll tax liability based on your total wages. Uses SRO Victoria rates effective from 1 July 2025.
Total taxable wages paid to Victorian employees for the financial year. Includes salaries, wages, commissions, bonuses, and superannuation.
2025-26 Victoria Payroll Tax
Rate: 4.85%
Threshold: $1,000,000
Surcharge: +1% (>$10M) or +2% (>$100M)
Surcharge combines mental health levy and COVID-19 debt levy.
Enter your total Victorian wages to calculate payroll tax.
Payroll tax applies to businesses with annual Victorian wages over $1 million.
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| Item | 2025-26 |
|---|---|
| Payroll tax rate | 4.85% |
| Regional employer rate | 1.2125% |
| Tax-free threshold | $1,000,000 |
| Combined surcharge (wages > $10M) | +1% |
| Combined surcharge (wages > $100M) | +2% |
| Monthly lodgement threshold | $40,000 annual liability |
Payroll tax is calculated only on wages that exceed the threshold. If your total Victorian wages are $1.5 million, you pay tax on $500,000 (the amount over $1 million).
Victorian employers with national wages exceeding $10 million pay a combined surcharge on their Victorian taxable wages. This includes the mental health and wellbeing levy (from 2022) and the COVID-19 debt levy (2023-2033).
| National wages | Surcharge | Total rate |
|---|---|---|
| Up to $10 million | 0% | 4.85% |
| $10M – $100 million | 1% | 5.85% |
| Over $100 million | 2% | 6.85% |
Worked example
National business: $2,000,000 VIC wages, $15,000,000 total national wages.
Taxable wages include
Exempt wages include
| Item | Victoria | NSW |
|---|---|---|
| Tax rate | 4.85% | 5.45% |
| Threshold | $1,000,000 | $1,200,000 |
| Surcharge (>$10M) | +1% | N/A |
| Surcharge (>$100M) | +2% | N/A |
| Monthly lodgement | >$40,000 liability | >$20,000 liability |
Victoria has a lower base rate but also a lower threshold. Businesses with wages between $1 million and $1.2 million pay payroll tax in Victoria but not in NSW. Large employers in Victoria face additional surcharges not applicable in NSW.
If your business pays wages in multiple states, your Victorian tax-free threshold is reduced proportionally.
Interstate threshold formula
VIC threshold × (VIC wages ÷ Total AU wages)
Worked example
VIC wages $600,000 • NSW wages $1,400,000 • Total $2,000,000.
Monthly lodgement
If your annual Victorian payroll tax liability exceeds $40,000, you must lodge monthly returns.
Annual reconciliation
All payroll tax payers must lodge an annual reconciliation by 21 July each year, reconciling monthly returns against actual wages for the financial year.
| Date | Event |
|---|---|
| 7 August 2025 | July return due |
| 7 September 2025 | August return due |
| 7 October 2025 | September return due |
| 7th of each month | Previous month's return due |
| 21 July 2026 | Annual reconciliation due |
What is the Victoria payroll tax rate?
The Victoria payroll tax rate is 4.85% for 2025-26. This rate applies to taxable wages exceeding the threshold of $900,000. Large employers with national wages over $10 million pay an additional 0.5% mental health levy.
What is the payroll tax threshold in Victoria?
The Victoria payroll tax threshold is $1,000,000 for 2025-26 (increased from $900,000 on 1 July 2025). Businesses only pay payroll tax on wages exceeding this threshold. The threshold may be reduced if you pay wages in multiple states or are part of a group.
Do I need to register for payroll tax in Victoria?
You must register for Victorian payroll tax within 7 days of your total Australian wages exceeding the relevant threshold. Even if your Victorian wages alone don't exceed $900,000, you may need to register if grouped with other businesses or if you pay interstate wages.
What is the combined payroll tax surcharge?
Victoria has a combined surcharge that includes the mental health and wellbeing levy (from 2022) and the COVID-19 debt levy (2023-2033). Businesses with national wages over $10 million pay 1% extra, while those over $100 million pay 2% extra. This brings the effective rate to 5.85% or 6.85% for larger employers.
Are contractor payments subject to payroll tax?
It depends. Payments to contractors may be taxable if the contractor is not genuinely independent, or if the contract is primarily for labour. SRO Victoria applies specific tests to determine whether contractor payments are taxable.
How is payroll tax calculated on fringe benefits?
The taxable value of fringe benefits for payroll tax purposes is the Type 2 grossed-up value (taxable value × 2.0802 for 2025-26). This amount is then included in your total taxable wages.
Tax Accuracy & Sources
Estimates Victoria payroll tax based on Victorian wages including combined surcharge tiers. It does not cover exempt wages, regional employer eligibility, grouping provisions, or contractor classification.
VIC Payroll Tax Guides
See payroll tax on common wage totals and compare nearby thresholds.