Payroll tax in Queensland is collected by the Queensland Revenue Office, not the ATO, and it starts once your wage bill crosses the state threshold. Queensland has a couple of features worth understanding: two rate tiers depending on your size, a discount for regional employers, and a mental health levy that applies to large payrolls. Here is what applies for the 2026-27 financial year.
Queensland has an annual threshold of $1,300,000, the highest of the mainland eastern states. Above that, the rate depends on your size. Employers with Australian taxable wages of $6.5 million or less pay 4.75%. Employers above $6.5 million pay 4.95% on their Queensland wages. The threshold itself phases out as your wages climb above $1.3 million, so larger employers gradually lose the tax-free portion.
Regional Queensland employers get a 1% discount on the rate, which runs until 30 June 2030. That takes the standard rate down to 3.75% for qualifying regional businesses, a meaningful saving if your business is based outside the south-east corner and most of your wages are paid to regional employees.
As in every state, Queensland taxable wages are broad: salaries, superannuation, bonuses, commissions, allowances, fringe benefits and many contractor payments. Super is included in the calculation, so your superannuation contributions form part of your payroll tax base. 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 and not just for super and PAYG.
Not sure whether you have crossed the Queensland threshold, or whether the regional discount applies to you? Book a free call and we will work through it with you.
Queensland charges a mental health levy on top of payroll tax for large employers. It adds 0.25% on the part of your annual Australian wages above $10 million, and a further 0.5% on the part above $100 million. Like the interstate surcharges, this only affects sizeable payrolls, so most small and medium businesses never encounter it, but it is worth knowing about if you are scaling quickly.
Once registered, you lodge periodic returns through QRO Online, generally within seven days of the end of each period, and complete an annual return after the financial year ends in July. You need to register once your wages are likely to exceed the threshold, not only once they actually have.
If you have employees in Queensland and other states, you apportion your wages and Queensland's threshold applies only to the Queensland share. The harmonised grouping rules apply here too, so related or commonly controlled entities are grouped and share one threshold rather than each getting their own. Our payroll tax by state guide lays out how Queensland compares with the rest of the country.
The most common Queensland slip-ups are assuming payroll tax is a federal tax when it is administered by the Queensland Revenue Office rather than the ATO, overlooking that super and many contractor payments count as taxable wages, and assuming that splitting a business into separate entities creates separate thresholds. It does not, because the grouping rules add related businesses together. If your business is regional, make sure you are claiming the 1% discount, and if you are approaching $10 million in wages, build the mental health levy into your forecasts early rather than being caught out by it later.
Queensland payroll tax starts at $1.3 million of annual wages, at 4.75% up to $6.5 million and 4.95% above that, with a 1% discount for regional employers until 2030. Super and many contractor payments count as wages, the threshold phases out as you grow, and a mental health levy applies to large payrolls. If you are near the threshold or based regionally, it pays to get the detail right.
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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