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.
Victoria payroll tax rates 2025-26
| 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).
Combined payroll tax surcharge
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% |
Example
A national business with:
- Victorian wages: $2,000,000
- Total national wages: $15,000,000
Adjusted Victorian threshold:
$1,000,000 × ($2M ÷ $15M) = $133,333
Taxable wages: $2,000,000 - $133,333 = $1,866,667
Victorian payroll tax:
Base tax: $1,866,667 × 4.85% = $90,533
Combined surcharge: $1,866,667 × 1% = $18,667
Total: $109,200
What wages are taxable?
Victorian payroll tax applies to most payments made to employees and some contractors:
Taxable wages include:
- Salaries and wages
- Commissions
- Bonuses and incentive payments
- Fringe benefits (taxable value × 2.0802)
- Superannuation contributions
- Allowances
- Directors' fees
- Contractor payments (in some cases)
Exempt wages include:
- Apprentice and trainee wages (conditions apply)
- Wages paid by charities (some exemptions)
- Parental leave payments
- Workers compensation payments
- Genuinely independent contractor payments
Victoria vs NSW payroll tax
| 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.
Interstate wages and threshold adjustment
If your business pays wages in multiple states, your Victorian tax-free threshold is reduced proportionally. The formula is:
VIC threshold × (VIC wages ÷ Total Australian wages)
Example
A business pays:
- Victoria wages: $600,000
- NSW wages: $1,400,000
- Total Australian wages: $2,000,000
Adjusted VIC threshold:
$1,000,000 × ($600,000 ÷ $2,000,000) = $300,000
Victorian payroll tax:
($600,000 - $300,000) × 4.85% = $14,550
Lodgement and payment
Monthly lodgement
If your annual Victorian payroll tax liability exceeds $40,000, you must lodge monthly returns.
- Due date: 7 days after the end of each month (or next business day)
- Nil returns: Required even if no tax is payable for the month
- Method: Via SRO Victoria's online portal (PTX Express)
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.
Key dates 2025-26
| 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 |
Frequently asked questions
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.
VIC Payroll Tax Guides
See payroll tax on common wage totals and compare nearby thresholds.
Move from payroll tax estimates into branding-ready payroll paperwork
Once you understand the state payroll tax exposure, move into the branding-ready document set for payslips, timesheets, expense claims, and cleaner supporting payroll records.