Payroll tax in South Australia applies once your Australia-wide taxable wages, or your group's, exceed $1.5 million a year. Above that, the rate is variable from 0% to 4.95% on wages between $1.5 million and $1.7 million, and 4.95% above $1.7 million. Employers also get a deduction of up to $600,000 a year, so tax is worked out on wages after that deduction.
SA's mix of a registration threshold, a fixed deduction and a variable rate band is unusual, and it's the reason a business just over the line pays far less than the headline rate suggests. It also means two businesses with similar payrolls can face quite different bills depending on grouping and interstate wages. Everything below comes from RevenueSA's payroll tax pages, and the figures are as of October 2026.
South Australia's numbers
| Item | South Australia, from 1 January 2019 |
|---|---|
| Registration threshold | $1,500,000 a year, equal to $28,846 a week or $125,000 a month |
| Rate, wages $1.5 million or less | Nil |
| Rate, over $1.5 million to $1.7 million | Variable from 0% to 4.95% |
| Rate, over $1.7 million | 4.95% |
| Maximum deduction | $600,000 a year, up to $50,000 a month |
| Exempt motor vehicle allowance, 2026-27 | 88c per km |
| Exempt accommodation allowance, 2026-27 | $328.85 per night |
The SA formula, step by step
- Start with gross taxable South Australian wages.
- Subtract your deduction entitlement, up to $600,000 a year.
- The result is net taxable South Australian wages.
- Multiply by the rate set by your total Australian annual wages, or your group's.
- That's the payroll tax payable.
RevenueSA's own simple example: a business employing only in South Australia with taxable wages of $1.6 million has a deduction of $600,000, so payroll tax is calculated on $1 million. Because $1.6 million sits inside the variable band, the rate applied is between 0% and 4.95%, not the full rate.
Why the rate is only an estimate during the year
The rate depends on total Australian annual wages, which aren't known until the year ends. So RevenueSA Online sets an estimated rate from the annual wages you declare at the start of the financial year, and the actual rate is fixed at the annual reconciliation in July. If the estimate was too high you get a refund; if it was too low you pay the shortfall.
Part-year employers are annualised. RevenueSA's example: a business trading from 1 November 2024 to 30 June 2025, 211 days, paid $1 million in Australian wages. Annualised, that's $1,729,857, which is over $1.7 million, so the rate is 4.95%.
When the deduction shrinks
- You're part of a group: the group shares one entitlement, and the designated group employer can allocate any unused amount to members at the annual reconciliation.
- You, or your group, employ in South Australia for only part of the financial year.
- You, or your group, also employ in another state or territory.
Allowances that aren't taxed
Motor vehicle and accommodation allowances are exempt from SA payroll tax to the extent they don't exceed the exempt rates. For 2026-27 those are 88c per km and $328.85 per night, up from 88c and $323.00 in 2025-26. The motor vehicle rate follows the ATO figure for the previous financial year, and the accommodation rate the ATO figure for the current year, using the lowest capital city for the lowest salary band. Anything paid above those rates is taxable wages.
Common SA payroll tax mistakes
- Reading the 4.95% headline as your rate when your wages sit between $1.5 million and $1.7 million, where it's variable.
- Leaving the start-of-year wage estimate untouched as the business grows, which builds up a shortfall for July.
- Forgetting that a new or seasonal business is annualised, so a short year can still land on the full rate.
- Testing a single entity when it belongs to a group whose combined wages pass $1.5 million.
- Assuming nothing changes when you start paying staff in another state. Interstate wages reduce the deduction you can claim in South Australia.
Registering for SA payroll tax
You must register when your Australia-wide taxable wages exceed the South Australian threshold and you pay wages in South Australia. In a group, registration is required whatever the individual member's wage level, once the group's Australian wages exceed the threshold. RevenueSA recommends registering when your weekly taxable wages consistently exceed $28,846, to avoid penalties.
- Register as a RevenueSA Online user.
- Use the emailed link to register your organisation for the payroll tax component; you have 28 days before the registration expires.
- Have your employer name, ABN and ACN if applicable, organisation type, nature of business, addresses, contact person and South Australian employment details ready.
- Name at least one person with Administrator access, who can make payments and lodge the annual reconciliation.
Returns are lodged monthly or annually, as the Commissioner decides, with an annual reconciliation at the end of each financial year. If you also employ in NSW, compare payroll tax in NSW, and remember payroll tax is separate from the PAYG withholding you take from each employee's pay.
The verdict
If your Australia-wide wages are near $125,000 a month and some are paid in South Australia, register before it becomes a penalty problem. Just over $1.5 million, the variable rate and the $600,000 deduction keep the bill small, but by $1.7 million you're at the full 4.95%. Review your estimate during the year so July's reconciliation brings a refund, not a bill.
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Frequently asked questions
What is the payroll tax threshold in South Australia?
$1,500,000 a year, equivalent to $28,846 a week or $125,000 a month, based on Australia-wide wages.
What is the payroll tax rate in SA?
Nil up to $1.5 million, variable from 0% to 4.95% between $1.5 million and $1.7 million, and 4.95% above $1.7 million.
What is the SA payroll tax deduction?
The maximum deduction is $600,000 a year, up to $50,000 a month, and it's reduced for groups, part-year employers and interstate employers.
How is SA payroll tax calculated?
Gross taxable South Australian wages minus the deduction equals net taxable wages, which is multiplied by the rate set by total Australian annual wages.
When is the SA payroll tax rate finalised?
At the annual reconciliation in July. During the year RevenueSA Online uses an estimated rate based on your declared annual wages.
How long is there to complete SA payroll tax registration?
You have 28 days to complete your registration in RevenueSA Online before it expires.
