What Counts as Wages for Payroll Tax?

Included in taxable wages

• Gross salaries and wages — all payments to employees before tax.
• Bonuses and commissions — performance payments.
• Director's fees — fees paid to directors.
• Employer superannuation contributions — the employer's contribution, not the employee's salary sacrifice. Superannuation is liable in full.
• Fringe benefits — included at their grossed-up taxable value. The Type 2 gross-up factor (1.8868 for the period ending 31 March 2027) applies to non-employee benefits. Verify the current gross-up factor against the ATO's published rates.
• Contractor payments — certain payments to contractors for labour-only services are deemed wages. See our contractors and relevant contracts guide.
• Deemed wages — payments to medical practitioners under Service Facility Agreements (per Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue). See the medical practice worksheet.

Exempt wages

Exemptions vary by jurisdiction but commonly include:

• Apprentice and trainee wages — NT exempt from 1 July 2025; Queensland operates a rebate extended to 30 June 2027. Other jurisdictions vary.
• Charitable and religious body exemptions — wages paid by organisations with charitable or religious status.
• Parental leave, volunteer service, defence and emergency service leave — generally exempt.
• Commonwealth government wages in the ACT — exempt where the employer is the Commonwealth.

Superannuation

Employer superannuation contributions are liable in full. This includes the Superannuation Guarantee (12.0% for FY 2026/27) and any additional employer contributions. Salary sacrifice amounts are also included in taxable wages.

Fringe benefits

Fringe benefits are included at their grossed-up taxable value. The Type 2 gross-up factor (1.8868 for the period ending 31 March 2027) applies. Verify the current factor against the ATO's published rates, as it is indexed annually.

Verify your figures

Use our calculator and see the rate table for verified thresholds and rates.