Payroll tax is a tax levied by state governments and the rates and deductibles vary from state to state.
With respect to Western Australia, the rate of the payroll tax is 5.5% which is levied on any wages in excess of $950,000 (effective January 1, 2020) however the tax is calculated on a sliding scale basis on the excess of $950,000 and the deductible ceases for wages greater than or equal to $7.5M.
There are some important compliance issues with respect to payroll tax. In summary, these are as follows:-
For clarification of taxable wages in WA go to- https://www.wa.gov.au/organisation/department-of-finance/payroll-tax#taxable-wages
For clarification of exempt wages in WA go to- https://www.wa.gov.au/organisation/department-of-finance/payroll-tax-exemptions
Grouping Provisions: For the purpose of calculating payroll tax the OSR groups entities where any of the following exist:-
Where a group exists the deductible amount is applied to one member of the group with the balance of group members paying the tax on all assessable wages.
For clarification of grouping provisions in WA go to:-https://www.finance.wa.gov.au/cms/uploadedFiles/_State_Revenue/Pay-roll_Tax/Payroll_Tax_Fact_Sheet_-_Grouping_Provisions.pdf
It is important that employers comply with all aspects of the payroll tax act as there are significant fines and or penalties imposed by all state governments for non-compliance.