New South Wales Payroll Tax Calculator

Worked examples (FY 2026/2027)

These results are computed live by the calculation engine at page render — they cannot drift from the calculator above.

Registration & lodgement

New South Wales payroll tax threshold history

Since FY 2021/2022, the annual payroll tax threshold in New South Wales has not changed at all. In FY 2026/2027 it is $1,200,000. The table below shows the threshold and headline rate for every financial year currently tracked in the engine. These values are drawn directly from the statutory registry, so if a legislative amendment is recorded there it will automatically appear here.

Rates and thresholds should be confirmed against the official Payroll Tax Act 2007 (NSW)and the relevant state revenue office website before lodgement.

How the NSW threshold works in practice

NSW has the simplest rate structure in the country and one of the most common traps. The rate is a flat 5.45% with no taper, no surcharge and no regional differential, and the threshold has been $1,200,000 since 2022-23. Where a group pays wages in more than one state the deduction is apportioned by NSW's share of Australian wages: deduction = $1,200,000 × (NSW wages ÷ Australian wages). A group with $2,000,000 of NSW wages inside $5,000,000 of national wages receives a $480,000 deduction, not the full $1.2M.

The monthly threshold is the part that catches practices out. It is day-weighted — $1,200,000 × days in the month ÷ 365 — rather than a flat $100,000. In a 31-day month the monthly threshold is $101,918. A practice that remits a round $100,000 on the assumption that it sits exactly at the threshold has, in every 31-day month, remitted slightly too little.

NSW treats GP payments as wages, then rebates the tax

NSW applies the relevant contract provisions to medical practices. Where a practice bills Medicare in its own name and remits the balance to a doctor under a Service Facility Agreement, the amount remitted is deemed wages and is added to staff wages for the threshold test. The doctor's ABN does not change that.

From 4 September 2024 the state softens the result with a rebate rather than an exemption. The rebate is available where at least 80% of GP services are bulk-billed in metropolitan Sydney, or 70% elsewhere, assessed across services delivered by both contractor and employee GPs. Because it is a rebate, tax is assessed first and reduced afterwards; because eligibility is a cliff, a practice at 79% in metropolitan Sydney receives nothing at all rather than a proportionate amount.

What grouping costs an NSW practice

Only one entity in a payroll tax group may claim the threshold — the Designated Group Employer. Every other member pays 5.45% from the first dollar of wages. Medical practices group more often than they realise: a practice company, a service entity, a family trust holding the rooms and a second practice under common control are frequently a single group.

The arithmetic is stark. A single NSW employer with $2,000,000 of wages pays tax on $800,000 — $43,600. If the same $2,000,000 sits in a group member that is not the DGE, it pays 5.45% on the whole amount: $109,000. The $65,400 difference is entirely a function of which entity holds the wage base, and it is the single largest lever an NSW practice has.

What counts as the deemed wage in NSW

In NSW the deemed wage is the amount the practice remits to the practitioner — the gross billings it collects, less the service fee it retains. It is not the practitioner's net drawings and it is not the practice's margin. Where the practice bills $250,000 on behalf of a contractor GP and retains a 30% service fee, the deemed wage is $175,000, and that is the figure added to employed staff wages for the threshold test.

Because the NSW rebate attaches only to the payroll tax on contractor GP payments, the practice has to be able to isolate that portion from everything else. Employee GP wages and non-GP practitioner payments do not qualify for the rebate. A single pooled 'doctor costs' line in the accounts will not support a claim: the records need to separate contractor GP remittances, employee GP wages and other practitioner payments, by practitioner and by period.