Changes from 1 January 2019

From 1 January 2019, businesses with annual taxable Australia wide wages of up to $1.5 million are no longer liable for payroll tax, and those with taxable wages between $1.5 million and $1.7 million benefit from a reduced payroll tax rate. For businesses grouped for payroll tax the $1.5 million threshold relates to the total taxable wages of all group members.

The deduction entitlement remains unchanged. Businesses required to pay payroll tax continue to receive a deduction entitlement of up to $600 000.  For businesses with taxable Australia wide wages exceeding $1.5 million, payroll tax will be payable on taxable wages less any deduction entitlement up to a maximum of $600 000.

For businesses/groups with taxable Australia wide wages between $1.5 million and $1.7 million a variable rate from 0% to 4.95% applies.

As these changes come into effect mid-financial year, the 2018-19 financial year will be split into two return periods:

Period 11 July 2018 to 31 December 2018
Period 21 January 2019 to 30 June 2019

What do I need to know?

Employers with estimated wages under $1.5 million for 2018-19

From 1 January 2019, you are no longer required to pay payroll tax in South Australia if your Australia wide wages, or group wages, continue to remain below $1.5 million.

Do I need to continue to lodge monthly returns?

No. If you have advised RevenueSA that your estimated Australia wide wages, or group wages, for the 2018-19 financial year are under $1.5 million, RevenueSA will convert you to an annual cycle so you are not required to lodge returns for the January 2019 to May 2019 return periods.

Can I cancel my registration?

No. Although you will only pay tax for the July to December period liability for 2018-19 is based on the full year’s wages. Actual tax due can’t be calculated until the full year’s wages are known. If you expect your 2019-20 financial year Australia wide wages, or group wages, to remain under $1.5 million, you should cancel your registration as part of the 2018-19 Annual Reconciliation. If you cease employing in South Australia before 30 June 2019, please contact RevenueSA.

When can I lodge my 2018-19 Annual Reconciliation?

You will be required to complete the 2018-19 Annual Reconciliation by 22 July 2019. An email will be sent to you once the Annual Reconciliation opens in mid-June 2019.

Employers with estimated wages between $1.5 million and $1.7 million for 2018-19

Has the rate changed for my monthly returns?

Yes. You should continue to lodge your monthly returns using your current deduction entitlement. The rate of tax you pay is automatically calculated at the new rate when you complete and lodge your returns.

The rate at which payroll tax is applied will depend on your estimated annual wages (for Period 2 this will be between 0% and 4.95%). This will be automatically calculated through the online return process.

Calculat your payroll tax rate

Will both periods be calculated in my 2018-19 Annual Reconciliation?

Yes. When you complete your 2018-19 Annual Reconciliation you will need to provide a split of your, or your group’s, total South Australian wages for the year. Payroll tax payable and the deduction entitlement will be calculated based on the proportion of your wages paid in each period. A screen in the annual reconciliation will show the tax due for each period.

Employers with wages over $1.7 million for 2018-19

No change. You should continue to lodge your monthly and annual reconciliations returns using your current deduction entitlement (up to $600 000 p.a.).

Payroll Tax Rate Change Summary

Annual Taxable WagesFY 2018 -2019FY 2019-20 onwards
July to DecemberJanuary to June
$600 000 - $1.5 millionVariable 2.5% to 4.95%0%0%
$1.5 Million to $1.7 million4.95%Variable 0% to 4.95%Variable 0% to 4.95%
Over $1.7 million4.95%4.95%4.95%

link to calculate your payroll tax rate

More information

  • You can view a recording of a webinar that will  explain these changes.
  • Information will also be sent in June 2019 prior to the 2018-19 Annual Reconciliation. Webinars will also be conducted in June/July 2019 to assist you in completing your annual reconciliation.
  • If you have specific questions, please contact our payroll tax team at payrolltax@sa.gov.au or (08) 8204 9880.