Guide · Proposed changes
Victorian election 2026: payroll tax
Nothing about Victorian payroll tax changes because of the election. Every return lodged before new legislation passes uses the current rules: a $1,000,000 tax-free threshold, a 4.85% metro rate (1.2125% for eligible regional employers), and the partial exemption for general practitioners that has applied since 1 July 2025. As at 29 October 2026, the Liberals and Nationals are the only major party to have published a payroll tax commitment: to scrap payroll tax on general practice, lift the threshold to $1,200,000 by 2028-29 and cut the metro rate to 4.8% from 2030-31. We found no published payroll tax commitment from Labor or the Greens.
This page reports what parties have published and does not endorse any of them. We will update it as commitments change, after the election on 28 November 2026, and when anything is legislated.
The law today
These are the settings the Victorian payroll tax calculator applies for 2026-27, checked against the State Revenue Office on 28 October 2026:
- Threshold: $1,000,000 a year, raised from $900,000 on 1 July 2025. It phases out at 50 cents per dollar of Australian wages between $3,000,000 and $5,000,000, so groups above $5,000,000 get no threshold.
- Rates: 4.85% metro, 1.2125% for eligible regional employers.
- Surcharges: the mental health and COVID-19 debt surcharges add a combined 1% above $10,000,000 of Australian wages and 2% above $100,000,000. The COVID-19 debt surcharge runs to 30 June 2033.
- General practitioners: since 1 July 2025, wages paid to employee and contractor GPs are exempt in proportion to their fully funded work (bulk-billed Medicare benefits, Medicare incentive payments and vaccine consumables). Privately billed work remains taxable. Non-GP specialists, dentists and allied health practitioners have no equivalent exemption. The Victorian medical practice page sets out how it works.
What each party has committed to
| Party | Payroll tax commitment | Published detail |
|---|---|---|
| Liberals and Nationals | Scrap payroll tax on general practice. Lift the threshold to $1,200,000 by 2028-29. Cut the metro rate to 4.8% from 2030-31. | GP commitment announced 11 July 2026. RACGP Victoria has reported it would apply by Christmas if elected. No published costings, scope or year-by-year threshold path. |
| Labor | None found. | Has committed to cut land tax and to review property taxes. |
| Greens | None found. | — |
| One Nation | Lift the payroll tax threshold. | No figure or timing published. |
“None found” means we found no published payroll tax commitment as at 29 October 2026, not that a party has ruled one out. Sources are listed at the end of this page.
What it would mean for a practice
Two worked examples show the size of the change. Both assume the current rules stay in place except for the change described, that Australian wages are below the $3,000,000 phase-out point, and that the practice is a metro employer. Final legislation could differ.
A practice without GP wages
Take a dental or allied health practice with $1,500,000 of taxable wages. Today it pays ($1,500,000 − $1,000,000) × 4.85% = $24,250 a year. With a $1,200,000 threshold at the current rate, it would pay $14,550. With the threshold and the 4.8% rate both in place from 2030-31, it would pay $14,400. Almost all of the saving comes from the threshold, not the rate.
A general practice
Take a general practice with $600,000 of employed staff wages and $2,000,000 paid to contractor GPs under relevant contracts, where 60% of GP income is fully funded. Today, 60% of the GP payments ($1,200,000) are exempt, leaving $1,400,000 of taxable wages and a bill of ($1,400,000 − $1,000,000) × 4.85% = $19,400. If all GP wages were exempt, as they are in Queensland, taxable wages would fall to $600,000, below the threshold, and the bill would be nil.
Whether a Victorian exemption would cover privately billed GP work, employed GPs and GP registrars in the same way has not been published. Every state exemption to date has been limited to general practitioners, so specialists, dentists and allied health practitioners should not assume they would be covered.
What to do now
Keep lodging under the current rules. A promise is not a concession, and the State Revenue Office will assess under the law in force on the day the wages were paid. Victorian general practices should keep recording their fully funded proportion with supporting evidence, because the current exemption depends on it and it will matter for any transition. It is too early to restructure contracts or billing on the strength of any commitment.
To see where your own practice stands today, use the Victorian payroll tax calculator or the medical practice worksheet, and check the rate changes log after the election for anything that becomes law.
Sources
- SRO Victoria: threshold and phase-out rate
- SRO Victoria: medical industry
- RACGP: Victorian GPs welcome Liberals and Nationals payroll tax relief election commitment (11 July 2026)
- The Medical Republic: What's on RACGP Victoria's election wishlist? (16 July 2026)
- Kalkine: the Opposition's $1.2 million threshold and 4.8% rate plan
- SmartCompany: Carroll and Wilson pitch tax cuts (28 October 2026)
Frequently asked questions
Has Victorian payroll tax changed because of the 2026 election?
No. Election commitments are not law. Until new legislation passes, Victorian payroll tax uses a $1,000,000 threshold, a 4.85% metro rate (1.2125% regional) and the partial exemption for general practitioners' fully funded work that has applied since 1 July 2025.
What have the parties promised on Victorian payroll tax?
As at 29 October 2026, the Liberals and Nationals have committed to scrap payroll tax on general practice, lift the threshold to $1,200,000 by 2028-29 and cut the metro rate to 4.8% from 2030-31. One Nation has said it would lift the threshold without giving a figure. We found no published payroll tax commitment from Labor or the Greens.
Would scrapping GP payroll tax cover specialists, dentists or allied health?
The scope has not been published. Every state exemption so far, including Queensland's, has been limited to general practitioners, so specialists, dentists and allied health practitioners should not assume they would be covered.
Should a Victorian practice change anything before the election?
No. Keep lodging under the current rules, and for general practices keep recording the fully funded proportion of GP income with supporting evidence. Restructuring contracts or billing on the strength of a commitment is premature.
Reviewed by eHealth Systems Pty Ltd