Payroll tax in the ACT is collected by the ACT Revenue Office, not the ATO, and it applies once your wage bill crosses the territory threshold. The ACT changed its payroll tax settings on 1 July 2026, so if you are working from older figures they are now out of date. Here is what applies for the 2026-27 financial year.
From 1 July 2026, the ACT reduced its annual tax-free threshold from $2 million to $1,750,000, and cut its base payroll tax rate from 6.85% to 6.75%. A lower threshold means more employers are now caught, while the slightly lower base rate softens the blow for those already paying. If you sat just under the old $2 million threshold, it is worth rechecking whether you now cross the line.
For 2026-27, the ACT threshold is $1,750,000 and the base rate is 6.75% on wages above it. The ACT uses a hard cut-in rather than a taper, so you pay nothing below the threshold and 6.75% on the amount above it. That base rate is among the highest in the country, which makes crossing the threshold more significant in the ACT than in most other states.
From 1 July 2026 the ACT also applies surcharges to large employers, based on Australia-wide wages above $20 million, with the effective rate rising for the very largest payrolls. These surcharges only affect sizeable national businesses, so almost no small or medium employer will encounter them, but they are part of the new ACT structure and worth knowing exist if you are scaling.
ACT taxable wages include salaries, superannuation, bonuses, commissions, allowances, fringe benefits and many contractor payments. Super is part of the base, so your superannuation contributions count toward the total. Contractor payments are a common trap: many arrangements count as taxable wages even when the worker invoices you, which is why getting the employee or contractor question right matters for payroll tax too.
Not sure whether the lower ACT threshold now catches your business? Book a free call and we will check it with you.
You register with the ACT Revenue Office once it is clear your wages will exceed the threshold. Once registered, you lodge returns through the ACT's online system, generally monthly, with an annual reconciliation after the financial year ends in July.
If you have staff in the ACT and other states, you apportion your wages and the ACT threshold applies only to the ACT share. The harmonised grouping rules apply, so related or commonly controlled businesses are grouped and share a single threshold. Our payroll tax by state guide shows how the ACT compares with the rest of the country.
From 1 July 2026 the ACT threshold is $1.75 million and the base rate is 6.75%, down from $2 million and 6.85%, with surcharges for large national employers above $20 million. The lower threshold means more Canberra businesses now pay, super and many contractor payments count as wages, and the grouping rules mean related businesses share one threshold. If you were close to the old line, recheck where you now sit.
We handle payroll tax registration and lodgement as part of our fixed-fee packages, with every question answered within 24 hours. Book your free call here.
Figures are current for the 2026-27 financial year and were checked in September 2026. This article is general information only and does not take your circumstances into account. Please seek advice tailored to your situation before acting.
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