WA Payroll Tax Calculator 2025-26
Calculate Western Australia payroll tax for your business. Features WA's unique diminishing threshold system where the deduction phases out between $1M and $7.5M.
Total taxable wages paid to WA employees for the financial year. Includes salaries, wages, commissions, bonuses, and superannuation.
2025-26 WA Payroll Tax
Rate: 5.5% (flat rate for all employers)
Threshold: $1,000,000
Phases out at: $7,500,000
WA uses a diminishing threshold that reduces to $0 at $7.5M wages.
Enter your total WA wages to calculate payroll tax.
Payroll tax applies to businesses with annual Australian wages over $1 million.
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The WA payroll tax rate is a flat 5.5% for all employers, regardless of wage size. This rate applies to taxable wages (wages above the deductible amount).
Note: WA previously had tiered rates (6% and 6.5% for large employers) from 1 July 2018 to 30 June 2023. These higher rates no longer apply.
Unlike other states with a flat threshold, WA uses a diminishing threshold that gradually reduces your deduction as wages increase.
| National wages | Deductible amount |
|---|---|
| $1,000,000 or less | $1,000,000 (full) |
| $2,000,000 | $846,154 |
| $3,000,000 | $692,308 |
| $5,000,000 | $384,615 |
| $7,500,000 or more | $0 (none) |
Diminishing threshold formula
Deductible = $1,000,000 − [(Wages − $1,000,000) × (2/13)]
The threshold reduces by $2 for every $13 of wages exceeding $1 million. This continues until wages reach $7.5 million, at which point no deduction applies.
Example: $2,000,000 in WA wages
For a business with $2,000,000 in total Australian wages (all in WA):
WA payroll tax applies to taxable wages paid to employees. This includes:
If your business pays wages in multiple states, your WA deductible amount is calculated based on total Australian wages, then applied proportionally to your WA wages.
Example: Interstate employer
A business pays $1,000,000 in WA wages and $3,000,000 in total Australian wages.
WA requires monthly lodgement for all registered employers, regardless of liability amount.
| Return type | Due date |
|---|---|
| Monthly returns | 7th of following month |
| Annual reconciliation | 21 July |
If the 7th falls on a weekend or public holiday, lodgement and payment are due on the next business day. June wages are included in the annual return.
You must register for WA payroll tax within 7 days after the month your total Australian wages first exceed:
Registration is required even if your WA wages alone are below the threshold, as long as your total Australian wages exceed it.
Why does WA use a diminishing threshold?
The diminishing threshold creates a more gradual transition into full payroll tax liability. Instead of a cliff where businesses just over $1 million suddenly owe tax on all excess wages, the system gradually increases the tax burden as wages grow. This is designed to reduce the incentive to artificially keep wages just below the threshold.
What if I have employees in WA and other states?
You'll need to register for payroll tax in each state where you pay wages. Your WA deductible amount is calculated based on total Australian wages, then apportioned based on your WA wages as a percentage of the total. This ensures fair treatment regardless of where wages are paid.
Are there any exemptions from WA payroll tax?
Some wages are exempt, including wages paid by certain charitable organisations, public hospitals, and some educational institutions. Apprentice and trainee wages may also qualify for exemptions or rebates. Contact the WA Office of State Revenue for specific exemption details.
How do I lodge my WA payroll tax return?
WA payroll tax returns are lodged through Revenue Online (ROL), the online portal managed by the Office of State Revenue. You can register, lodge returns, make payments, and manage your account through this system.
What happens if wages exceed $7.5 million?
Once your Australian taxable wages reach or exceed $7.5 million, the deductible amount becomes zero. This means you pay payroll tax at 5.5% on your entire WA taxable wages with no threshold deduction.
Tax Accuracy & Sources
Estimates Western Australia payroll tax based on WA wages and the diminishing threshold system. It does not cover exempt wages, grouping provisions, or contractor classification.
WA Payroll Tax Guides
See payroll tax on common wage totals and compare nearby thresholds.