Victoria Payroll Tax Calculator 2026-27
Calculate your Victorian payroll tax liability using the current threshold phase-out, regional rate and progressive surcharges.
Rates and thresholds are applied for the selected financial year.
Total taxable wages paid to Victorian employees this FY — salaries, wages, commissions, bonuses and super.
At least 85% of Victorian wages must go to employees who work mostly in regional Victoria.
2026-27 Victoria Payroll Tax
Rate: 4.85%
Threshold: $1,000,000
Regional rate: 1.2125%
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.Liability depends on Australian wages, the adjusted Victorian threshold and any surcharges.
Next best steps
| Item | 2026-27 |
|---|---|
| Payroll tax rate | 4.85% |
| Regional employer rate | 1.2125% |
| Tax-free threshold | $1,000,000 |
| Threshold phase-out | $3M–$5M Australian wages (50% rate) |
| Combined surcharge (wages > $10M) | +1% |
| Combined surcharge (wages > $100M) | +2% |
| Return cycle | Monthly unless SRO approves annual payment |
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 Australian wages exceeding $10 million may pay combined surcharges on Victorian taxable wages above the relevant apportioned thresholds. These comprise the mental health and wellbeing surcharge and the temporary COVID-19 debt surcharge.
| Australian wages | Combined marginal surcharge | Applied to |
|---|---|---|
| Up to $10 million | 0% | No surcharge |
| Over $10 million | 1% | VIC wages above apportioned $10M threshold |
| Over $100 million | Additional 1% | VIC wages above apportioned $100M threshold |
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 |
| Return cycle | Monthly by default; annual needs approval | Monthly above $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, the full threshold and the $3 million phase-out starting point are apportioned to Victoria. The 50% phase-out is then applied.
Interstate threshold formula
Apportioned threshold − 50% × VIC wages above apportioned $3M point
Worked example
VIC wages $600,000 • NSW wages $1,400,000 • Total $2,000,000.
Monthly lodgement
Registered Victorian employers are generally placed on a monthly return cycle. An annual cycle is available only when approved by the Commissioner, so liability alone does not guarantee annual reporting.
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 2026 | July return due |
| 7 September 2026 | August return due |
| 7 October 2026 | September return due |
| 7th of each month | Previous month's return due |
| 21 July 2027 | Annual reconciliation due |
What is the Victoria payroll tax rate?
The metropolitan Victoria payroll tax rate is 4.85% for 2026-27. Eligible regional employers use 1.2125%. The combined mental health and COVID debt surcharges are progressive: 1% applies above the apportioned $10 million threshold and another 1% above the apportioned $100 million threshold.
What is the payroll tax threshold in Victoria?
The full Victoria payroll tax threshold is $1,000,000 for 2026-27. It is apportioned for interstate or part-year employers, starts phasing out once Australian wages exceed $3 million, and reaches zero at $5 million.
Do I need to register for payroll tax in Victoria?
You must register if you pay wages in Victoria and your taxable Australian wages exceed the relevant monthly or annual threshold. Group and interstate wages count when testing the threshold, even if Victorian wages alone are below $1,000,000.
What is the combined payroll tax surcharge?
Victoria combines the mental health and wellbeing surcharge with the temporary COVID-19 debt surcharge. The first combined 1% applies only to Victorian wages above the apportioned $10 million threshold. A further 1% applies only above the apportioned $100 million threshold; it is not a flat 2% on the whole payroll.
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?
For Victorian payroll tax, Type 1 and Type 2 fringe benefits are combined and grossed up using the Type 2 factor of 1.8868 for the period ending 31 March 2027. The Victorian share is then included in taxable wages.
Tax Accuracy & Sources
Estimates Victoria payroll tax based on Victorian wages, the threshold phase-out and combined surcharge tiers. It does not determine regional employer eligibility or cover exempt wages, grouping provisions or contractor classification.
VIC Payroll Tax Guides
See payroll tax on common wage totals and compare nearby thresholds.