Payroll tax WA: 2026–27 rate, threshold and how it works in Western Australia

WA payroll tax has one rate and a threshold that fades away as you grow. That makes it simple for small employers and expensive for mid-sized ones: by $7.5 million of Australian wages, a WA employer pays 5.5% on every dollar. WA also stands apart on contractors. It never adopted the "relevant contract" rules used in the eastern states, so the question in WA is whether a worker is an employee at common law, or if you're acting as an employment agent.

This guide covers the 2026–27 rate and threshold, the diminishing threshold formula, registration and returns (including how RevenueWA's annual reconciliation works), what counts as wages, grouping, contractors, exemptions, penalties, and worked examples. For the other states, see our guide to payroll tax by state.

WA payroll tax at a glance (2026–27)

The $1 million threshold has applied since 1 July 2023. RevenueWA's employer guide lists $1 million, 5.5% and $7.5 million as the current rates and thresholds, and nothing changed for 2026–27.

What is the WA payroll tax rate for 2026–27?

The WA payroll tax rate for 2026–27 is 5.5% of taxable wages above your deductable amount. There's no lower rate for small employers, no regional rate and no surcharge for large employers. People searching for the "WA payroll tax rate 2027" will find it's the same 5.5% that has applied for several years.

The bigger variable is the threshold. WA calls the amount you can subtract the "deductable amount", and it depends on your total Australian wages.

How does WA's diminishing threshold work?

If your Australian taxable wages, or your group's, are more than $1 million but less than $7.5 million, your threshold is $1 million less 2/13 of the wages above $1 million. At $7.5 million the threshold reaches nil, and you pay 5.5% on all your WA wages.

Deductable amount = $1,000,000 − (Australian taxable wages − $1,000,000) × 2/13

WA only, not grouped, full year, 2026–27:

Between $1 million and $7.5 million, each extra dollar of wages costs about 6.3 cents in tax (5.5% plus the lost threshold), not 5.5 cents.

The deductable amount is apportioned if you also pay wages interstate (you get the WA share of it), if you employ for only part of the year, or if you join or leave a group during the year. Monthly returns use the monthly figure of $83,333 with the same 2/13 taper; RevenueWA's own example shows a month of $100,000 in wages giving a deductable amount of $80,769 and tax of $1,057.71.

Who has to register for payroll tax in WA?

You must register within 7 days after the end of the month in which you pay wages in WA (or the Indian Ocean Territories) and your total Australian taxable wages exceed $83,333 for that month. If you're in a group, the group's combined Australian wages decide it.

You register through Revenue Online, accessed with a RevenueWAConnect login. If you stop employing in WA, or your annual Australian wages fall below the threshold, ask RevenueWA to cancel the registration.

Some employers are exempt from registering at all, including religious organisations, certain public health service providers, schools below tertiary level, some government bodies, and public benevolent institutions and charitable bodies with an exemption or beneficial body determination in place.

When are WA payroll tax returns due?

Returns are due on the 7th of the month after each return period, and the annual reconciliation (with the June return) is due by 21 July. You lodge a return each period even if no tax is payable.

How does the WA annual reconciliation work?

During the year RevenueWA applies an estimated deductable amount to your returns, based on your estimated wages. After 30 June you lodge the actual figures and RevenueWA works out the actual deductable amount.

• By 21 July: lodge and pay your June return, make any adjustments to earlier returns, and (for interstate employers and designated group employers) lodge your Australian taxable wages and estimated wages for the coming year through the End of Year Lodgment function.
• Mid-August: RevenueWA completes the reconciliation and issues a debit or credit on your assessment advice.

Watch out: If you're an interstate employer or the DGE of an interstate group and you don't lodge your Australian taxable wages by the due date, you get no deductable amount for the year. Miss it and you pay 5.5% on every WA dollar.

Not sure which return you need to lodge? Ask us.

What counts as wages, and how does grouping work in WA?

WA taxable wages include salaries, super, fringe benefits, directors' fees, termination payments, employee share acquisitions, and payments to common law employees who are called contractors. GST components are excluded except on fringe benefits.

Businesses are grouped where they are related bodies corporate, use common employees, are under common control (the same person or persons have a controlling interest in two or more businesses), or one entity has a controlling interest in a corporation directly or through others; smaller groups are then subsumed into one larger group. Professional practices that share a single administrative service can also be grouped.

Once grouped, the group's wages decide registration and the deductable amount, only the designated group employer claims it, each member lodges its own returns, and every member is jointly and severally liable for the group's tax. You can apply to be excluded from a group (form FPRT2) except where corporations are related, which can't be excluded.

How does WA treat contractors for payroll tax?

WA is not harmonised with the other states on contractors. Payments to a contractor are taxable only if the worker is, in substance, a common law employee, or if you're an employment agent. The "relevant contract" rules and their exemptions, which tax many genuine contractors in NSW, Victoria, Queensland, SA, Tasmania and the ACT, don't apply in WA.

RevenueWA looks at the totality of the relationship, including:

• whether the contract and the way the work is actually done look like employment;
• whether the worker is paid to achieve a result or for their time;
• how much control and direction you have over the worker and the work;
• whether the worker runs an independent business;
• whether they can delegate or subcontract;
• how integrated they are into your business.

The employment agency provisions do apply in WA: if you supply a worker's services to a client, you're deemed the employer and the payments to the worker are taxable. Revenue Ruling PT 6 sets out RevenueWA's approach to subcontracting and employment agents, and you can ask RevenueWA for a determination (form FPRT6).

This difference matters for national businesses. A contractor arrangement that's taxed in NSW under the relevant contract rules may not be taxed in WA, and the reverse can be true for an agency arrangement. It's also why WA hasn't needed a GP-specific concession: medical practices are assessed on whether their doctors are actually employees. Our employee vs contractor guide explains the common law test in more detail.

What exemptions apply to WA payroll tax?

WA exempts apprentice wages (but not trainee wages under contracts from 1 July 2019), paid parental leave up to 14 weeks, new employees with a disability for two years, volunteer emergency leave, defence leave and workers compensation.

What are the penalties for WA payroll tax?

RevenueWA imposes penalty tax if you fail to register on time, lodge or pay late, underpay, understate wages or give false or misleading information, plus interest on late payments. The Commissioner can remit some or all of the penalty if you took reasonable steps or couldn't comply because of circumstances beyond your control (Commissioner's Practices TAA 18, 19 and 20). Taxpayers caught in an investigation can expect penalties on any underpayment found, so coming forward first is cheaper.

Keep payroll tax records for at least five years.

Worked example: a Perth business with staff in WA and Queensland

Hypothetical, rounded, 2026–27 rates.

Say a Perth engineering services company pays $3,000,000 of taxable wages to staff in WA and $1,000,000 to a site team in Queensland. It isn't grouped with any other business.

Step 1: Full deductable amount. Australian wages are $4,000,000. $1,000,000 − ($4,000,000 − $1,000,000) × 2/13 = $1,000,000 − $461,538 = $538,462.

Step 2: WA share. WA wages are 75% of Australian wages, so the WA deductable amount is $538,462 × 75% = $403,846.

Step 3: WA tax. ($3,000,000 − $403,846) × 5.5% = about $142,800 for the year.

Step 4: Queensland. The company also has $1,000,000 of Queensland wages and must check its Queensland position: its Australian wages are well above Queensland's $1.3 million threshold, so it will owe Queensland payroll tax on the Queensland share.

If the same company also paid $500,000 a year to labour-only "contractors" who work set hours under its supervision, RevenueWA could treat them as common law employees. That would add $500,000 to WA wages, cut the deductable amount further, and add roughly $30,000 a year, before interest and penalties on past years.

How BPAG helps with WA payroll tax

We calculate your deductable amount, test contractors under WA's common law approach and the eastern states' relevant contract rules side by side, lodge your returns, and handle the 21 July end-of-year lodgment so you don't lose the deduction. Our state taxes agent works through payroll tax in every state and territory, so a business employing in WA and the east gets one consistent calculation, and a qualified accountant reviews every figure before it's lodged or relied on.

We don't have a WA office, but most of our work is done by email, phone and video, and we work with WA businesses the same way. See our state taxes service, and our payroll and Payday Super service if you'd like us to run payroll as well.

What to send us

• Payroll reports for the last 12 months (and earlier years if you may have been liable) for every entity in your group
• The state or territory where each employee works
• Contractor and labour hire agreements, with what each contractor does, how they're paid and who supervises them
• Apprentice and trainee training contracts (with their class A or B status)
• Your Revenue Online client details, estimated wages for 2026–27 and any RevenueWA letters or assessments

General information only, current as at 23 October 2026. It is not personal tax, legal or financial product advice and doesn't take your circumstances into account. Talk to us before you act. Where a recommendation needs a licensed financial adviser or a solicitor, we work alongside them.