As we move closer to 2025, Western Australia’s payroll tax remains a pivotal consideration for employers. Understanding the latest thresholds, rates, and compliance requirements is essential for financial planning and growth. This guide brings you everything you need to know about Payroll Tax WA 2025—clear, up-to-date, and ready to inform better business decisions.
1. What Is Payroll Tax in Western Australia?
Payroll tax in WA is a state-level, self-assessed levy on employers whose taxable Australian-wide wages exceed a defined threshold. It helps fund vital public services such as healthcare, education, and public safety.(payrolltax.gov.au)
2. 2025 Rates & Thresholds
- Rate: A flat 5.5% applies to taxable wages above the threshold.
- Threshold: Annual taxable wages exceeding $1 million fall within taxable range. However, this threshold is tapered for wages between $1 million and $7.5 million.(Western Australian Government)
How the Tapering Works:
For annual wages between $1 million and $7.5 million, the tax‑free deductible amount shrinks gradually—by $2 for every $13 of wages above the $1 million threshold—until fully phased out at $7.5 million.(Western Australian Government)
3. Filing & Payment Schedules
| Return Type | Due Date |
|---|---|
| Monthly | 7th of the following month |
| Quarterly | 7th Oct/Jan/Apr, and 21st July |
| Annual (Reconciliation) | 21st July |
These deadlines ensure timely compliance and help prevent late penalties.
4. What’s Included in Taxable Wages
When calculating payroll tax, include:
- Salaries, wages, bonuses, allowances, fringe benefits
- Superannuation (beyond statutory contributions), contractors (if arrangement mirrors employment), and termination payments.
Exemptions may apply to wages paid to apprentices, certain trainees, and employees on parental leave, as well as charitable institutions.
5. Why “Payroll Tax WA 2025” Matters
Payroll tax isn’t static. Latest revenue forecasts show that payroll tax is expected to rise from $5.88 billion in FY 2024–25 to $6.15 billion in FY 2025–26—and potentially exceed $7 billion by 2028–29.(The West Australian)
Businesses across WA cite payroll tax as a major drain on growth—shaping hiring decisions, profitability, and expansion strategies.
6. Tips for Employers in 2025
- Monitor Wage Growth: Even modest increases can push you into tax liability territory.
- Plan Ahead: Consider strategic timing of wages, bonuses, or hiring to minimize liabilities.
- Track Exemptions & Grouping Rules: Grouped entities must combine wages—don’t miss thresholds.
- Use Tools: WA offers an official payroll tax calculator and resources to support accurate assessments.(Western Australian Government)
- Seek Advice: Given the complexity, experts can help optimize tax impact and compliance.
Conclusion
For 2025, Payroll Tax WA retains its 5.5% rate, with a $1 million annual threshold and a taper system up to $7.5 million. Understanding how wages, thresholds, and return obligations intersect can save money and avoid penalties. Be proactive—monitor developments, calculate accurately, and stay compliant.