Payroll tax in WA is charged at 5.5% on taxable wages paid in Western Australia and the Indian Ocean Territories. Employers or groups with annual Australian taxable wages over $1 million pay it, but the threshold's diminishing between $1 million and $7.5 million, so larger employers get a smaller tax-free amount. You must register within 7 days after the end of a month in which your Australian taxable wages exceed $83,333.
WA uses one flat rate and a sliding threshold, which makes the arithmetic simpler than some states but means the effective rate climbs as payroll grows. Everything below comes from the WA Department of Treasury and Finance's payroll tax pages and employer guide, and the figures are as of October 2026.
WA payroll tax in one table
| Item | WA rule |
|---|---|
| Rate | 5.5% of taxable wages |
| Annual threshold | $1 million in Australian taxable wages |
| Upper threshold | $7.5 million: at or above this, no deductable amount, so tax applies to all WA taxable wages |
| Registration trigger | Australian taxable wages over $83,333 in a month, while paying wages in WA or the Indian Ocean Territories |
| Registration deadline | Within 7 days after the end of that month |
| Return due | The 7th day of the month after the return period |
| Annual reconciliation | With the June return, on or before 21 July |
Your total Australian taxable wages decide whether you're liable, but you only pay tax on wages paid or payable in Western Australia or the Indian Ocean Territories. Groups are tested on the combined Australian wages of every member.
How the diminishing threshold works
Between $1 million and $7.5 million, the amount you can deduct, the deductable amount, tapers down. The WA formula uses a tapering value of 2/13, which means the threshold reduces by $2 for every $13 of wages over $1 million.
The deductable amount equals the annual threshold minus the wages over the threshold multiplied by 2/13. WA's own example: on annual wages of $1,200,000, the deductable amount is $1,000,000 minus ($1,200,000 minus $1,000,000) x 2/13, which comes to $969,231. Tax is then 5.5% of WA taxable wages minus that amount.
A second worked example from the guide: an employer paying monthly wages of $92,000 for 2025-26 has total wages of $1,104,000, which exceeds the annual threshold, and payroll tax of $6,600 applies for the period.
Which type of WA employer are you?
| Employer type | Meaning |
|---|---|
| Local non-group | Pays wages only in WA and isn't grouped with any other wage-paying entity |
| Local group | Grouped with at least one other entity, and every group member pays wages only in WA |
| Interstate non-group | Pays wages in WA and at least one other state or territory, not grouped |
| Interstate group | Grouped, pays wages in WA, and at least one group member pays wages interstate |
Every group must nominate a designated group employer, and that employer must pay wages in WA. The calculation the department applies depends on which of these four you are.
Registering and lodging in WA
- Check whether your Australian taxable wages, or your group's, exceeded $83,333 in a month while you paid WA wages.
- Register within 7 days after the end of that month through RevenueWAConnect and Revenue Online.
- Lodge a return by the 7th of the following month, even if no tax is payable; a monthly return must be lodged each month.
- At year end, lodge the annual reconciliation with the June return on or before 21 July.
| Return frequency | Annual estimated liability | Due |
|---|---|---|
| Monthly | $150,000 or more | 7 days after the end of the period |
| Quarterly | Less than $150,000 | 7 days after the end of the period |
| Annually | Less than $20,000 | 21 days after the end of the assessment year |
Returns are generally monthly unless you ask to lodge less often. You can cancel your registration if you stop employing in WA or the Indian Ocean Territories, or your total annual Australian taxable wages fall below the threshold.
Mistakes WA employers make
- Waiting to register until the annual total passes $1 million. The trigger is $83,333 of Australian wages in a single month.
- Skipping a monthly return because there's nothing to pay. A monthly return must be lodged each month whether or not tax is payable.
- Testing only your own wages when you're part of a group. The group's total Australian wages decide whether you register.
- Assuming the full $1 million is tax-free at any size. Above $1 million, it tapers by $2 for every $13 of wages.
The cost of getting it wrong is real. If you don't register and lodge as required, the department says it may apply penalty tax, make an estimate assessment of your liability and audit you to verify it.
Who doesn't pay
Exemptions cover wages paid by religious organisations, certain public health service providers, schools below tertiary level, some government departments including local governments, and public benevolent institutions and certain charitable bodies. Exempt employers don't register and their wages aren't assessable.
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If you employ across the border too, compare payroll tax in NSW, where the threshold and rate differ, and keep in mind that payroll tax sits alongside, not instead of, fringe benefits tax.
The verdict
If your national payroll's creeping past $83,333 a month and some of it's paid in WA, register within 7 days of the month it happens. Between $1 million and $7.5 million, run the 2/13 taper rather than assuming you get the full $1 million tax-free, and lodge every month even when the bill is nil.
Frequently asked questions
What is the payroll tax rate in WA?
The rate is 5.5% of taxable wages paid by employers or groups of employers.
What is the payroll tax threshold in WA?
The annual threshold is $1 million in Australian taxable wages, diminishing to nothing at $7.5 million.
When must I register for payroll tax in WA?
Within 7 days after the end of a month in which you pay WA wages and your total Australian taxable wages exceed $83,333.
How does the WA diminishing threshold work?
The threshold reduces by $2 for every $13 of wages over $1 million, using a tapering value of 2/13.
When are WA payroll tax returns due?
By the 7th day of the month after the return period, with the annual reconciliation and June return due on or before 21 July.
Do I lodge a WA return if no tax is payable?
Yes. A monthly return must be lodged each month whether or not tax is payable.
