Business tax
Two businesses can share one payroll tax threshold. Find out what that costs.
If the same people run two businesses, or staff work for both, the law can treat them as one employer with one tax-free threshold between them. Nobody writes to tell you. This calculator works out what your group owes in every state and territory at once, and what the years already behind you could cost.
Each business has its own ABN and its own payroll. The law can still count them as one.
Payroll tax grouping is when the law treats two or more businesses as a single employer. It happens when the same people control them, when an employee of one does any work for the other, or when one holds an interest in the other through a trust or a company. There is no minimum. A bookkeeper who does both sets of books can be enough. No notice is sent, and it applies whether or not anyone has registered.
Once businesses are grouped, they get one tax-free threshold between them, not one each. Every state then cuts its threshold down to the share of the group's Australian wages paid in that state. Thresholds run from $1,000,000 to $2,500,000, and ordinary rates from 4.00% to 8.75%, so the same wages cost a different amount in each state. Two businesses that each sit under the threshold on their own can owe tax on most of their wages once they are added together.
A revenue office usually goes back five years. Each of those years carries the unpaid tax, penalty tax of 25% for not taking reasonable care (75% if it was deliberate), and interest at 12.43% a year on top.
What the calculator works out
- All eight states and territories at once. Enter the wages each business pays in each state, and every state's threshold, rate and phase-out is applied the way its revenue office applies it.
- The shared threshold, split the way the law splits it. Each state's threshold is cut in proportion to the wages paid there, so you can see how much tax-free threshold being grouped takes away.
- Your shortfall against what has been declared. What the group should be paying, next to what each business has actually paid, to the dollar.
- The years already behind you. One to five years back, with penalty tax from 5% (if you tell the revenue office first) to 25% (for not taking reasonable care), and interest on each year separately.
- The extras that catch larger groups. The two Victorian surcharges and the Queensland levy, which start at $10 million of Australian wages, and contractor payments that count as wages.
What the full report adds
- Every way of dealing with it, priced and ranked. Carry on as you are, tell every revenue office before anyone asks, pay by arrangement, apply to be excluded from the group, claim the regional rate where the group qualifies, or separate the businesses. Each one is carried through to what the group pays in total, and put in order from the one that costs the least.
- How the penalty rate changes the total. The same shortfall priced at every published penalty rate, so you can see what telling the revenue office first is worth on your own figures.
- How close you are to each threshold. The headroom left in every state, and where the same wages would cost more or less.
- Something to take to your accountant. A payroll tax specialist's grouping review typically costs $3,000 to $10,000 or more, billed by the hour. The full report is $19, paid once, with no expiry, and you can run it again whenever your wages change. It does not replace that specialist. It means you walk in with the arithmetic already done.
What the calculator will not do
It does not decide whether your businesses are grouped. That is a question of law about your own arrangements, and only a revenue office or a registered tax agent can settle it. The calculator applies the eight published payroll tax schedules to the wages you enter and shows what they produce, with every working visible. It ranks options on one stated measure, total cost, and never recommends one. It is general information, not tax or legal advice. For an exclusion application, a disclosure or a dispute with a revenue office, talk to a registered tax agent or a payroll tax specialist.
Everything here runs on the published rates and thresholds for 2026-27.
What people ask before they run it
What is payroll tax grouping?
Payroll tax grouping is when the law treats two or more businesses as one employer, so they share one tax-free threshold instead of getting one each. It happens if the same people control them, if staff work across both, or if one holds an interest in the other through a trust or company. No notice is sent, and it applies whether or not anyone has registered.
How much payroll tax will my group actually pay?
It depends on where your wages are paid, not just how much you pay in total. Thresholds run from $1,000,000 in Victoria and Western Australia to $2,500,000 in the Northern Territory, and ordinary rates run from 4.00% to 8.75%. Each threshold is then cut in proportion to the share of your Australian wages paid in that state. This calculator works out all eight at once on the 2026-27 rates.
How is the payroll tax threshold split between states?
Each state cuts its threshold in proportion to the share of your total Australian wages paid there. The formula is that state's threshold multiplied by wages paid there, divided by total Australian wages. So a group paying $1,750,000 in New South Wales out of $3,350,000 across Australia does not get the full $1,200,000 threshold. It gets $626,866, and pays 5.45% on everything above that.
Can one shared employee put two businesses in the same group?
Yes. If an employee of one business does any work at all for another business, or there is an agreement for them to, the two businesses are grouped. There is no minimum number of hours or days. A bookkeeper who does both sets of books, or an office manager who answers both phones, is enough. A business can apply to be excluded from a group formed this way.
Who pays when businesses are grouped for payroll tax?
Every member of the group is liable for the whole group's payroll tax. One member, called the designated group employer, claims the threshold for all of them, and the others pay tax on all their wages with no threshold of their own. The members are jointly and severally liable, so a revenue office can chase any member for the full amount, even tax from a business that has since closed.
How far back can a revenue office go for unpaid payroll tax?
The usual limit is five years. It can go further where a business never lodged a return, where the facts were not fully disclosed, or where there has been fraud or evasion. On top of the unpaid tax, penalty tax runs from 5% if you disclose before any investigation, to 25% for not taking reasonable care, and 75% for intentional disregard. Interest is charged at 12.43% a year on each of those years separately.
What is a payroll tax voluntary disclosure, and what does it save?
A voluntary disclosure means telling a revenue office about unpaid payroll tax before it starts looking, and it cuts penalty tax by 80%. That brings the penalty down to 5% instead of 25%, and the premium part of the interest is commonly remitted as well. The tax itself does not change. Each state needs its own disclosure, so telling one revenue office does nothing in another.
Can a business get out of a payroll tax group?
Yes, in some cases, by applying for an exclusion order in each state where the group is registered. It is only available for groups formed by common control, shared employees or tracing of interests, not for related companies. The decision turns on how independently the businesses really run. An order in one state has no effect in another, and it does not undo the years already behind you.
Are contractor payments counted as wages for payroll tax?
Often, yes. In seven of the eight states and territories, a payment under a relevant contract (a contract for someone to provide services) counts as wages unless one of eight exemptions applies, such as 90 days of work or fewer in the financial year, or a contractor who hires other people to do the work. Having an ABN makes no difference. Western Australia never adopted these rules and uses the ordinary employee test instead.
Does superannuation count as wages for payroll tax?
Yes. Every employer superannuation contribution counts as wages for payroll tax, including the compulsory guarantee, salary sacrificed amounts and anything paid above the minimum. On an ordinary payroll that is more than a tenth of the total. Leaving it out is the most common mistake when a business first works out where it stands, and it can be enough to push a group over a threshold.
Is this payroll tax calculator giving me tax advice?
No. This is an information service: it applies the eight published payroll tax schedules to the wage figures you enter and shows what they produce, with every working visible. It ranks options on one stated arithmetic measure and does not recommend one. Whether your businesses are in fact grouped is a question of law about your own arrangements, and only a revenue office or a registered tax agent can settle it.
Everything on Payroll Tax Grouping
Your estimate is free, and it is a real answer.
Works out Australian payroll tax across all eight states and territories for a group of businesses treated as one employer, splits each jurisdiction's tax-free threshold by where the wages were paid, adds the state surcharges and levies, and prices every lawful way of dealing with what has been under-declared.
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