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Victoria's annual payroll tax-free threshold rises from AUD 900,000 to AUD 1,000,000 effective July 1, 2025, with monthly thresholds increasing from AUD 75,000 to AUD 83,333. A new phase-out mechanism applies for employers with Australian wages above AUD 3,000,000, with the threshold fully eliminated for those exceeding AUD 5,000,000. All registered employers in Victoria must recalculate their payroll tax liability and complete annual reconciliation by July 21, 2025.
Victoria Payroll Tax Threshold Increases to AUD 1,000,000 from July 1, 2025
Victoria's payroll tax-free threshold increases from AUD 900,000 to AUD 1,000,000 for annual returns effective July 1, 2025. The monthly threshold rises from AUD 75,000 to AUD 83,333. A new phase-out mechanism applies to employers with Australian wages above AUD 3,000,000, with the threshold fully eliminated for those exceeding AUD 5,000,000.
Who is affected
All employers registered for payroll tax in Victoria, Australia. The threshold increase benefits small and medium-sized employers. Larger employers with total Australian wages above AUD 3,000,000 face a graduated phase-out of the tax-free threshold. Employers with Australian wages exceeding AUD 5,000,000 receive no tax-free threshold.
What's changing
| Threshold Type | Previous (until June 30, 2025) | New (from July 1, 2025) |
|---|---|---|
| Annual threshold | AUD 900,000 | AUD 1,000,000 |
| Monthly threshold | AUD 75,000 | AUD 83,333 |
The State Revenue Office Victoria (SRO) introduced a phase-out mechanism for the first time. For every dollar of Australian wages above AUD 3,000,000, the tax-free threshold reduces proportionally. Employers with Australian wages of AUD 5,000,000 or more lose the entire tax-free threshold and pay payroll tax on all wages.
This change follows a two-stage threshold increase that began July 1, 2024, when the annual threshold rose from AUD 700,000 to AUD 900,000.
What NEO partners and clients should do
- By June 19, 2025: Update employer type, employment status, or contact details via the "update your records" tab in PTX Express. Employers registered in the past 12 months on an annual cycle who cannot access PTX Express before June 19 must contact SRO directly.
- June 19–July 21, 2025: Complete annual reconciliation for the 2024-25 financial year via PTX Express. All registered employers must lodge reconciliation online by July 21, 2025.
- From July 1, 2025: Recalculate payroll tax liability using the new AUD 1,000,000 annual threshold and AUD 83,333 monthly threshold. Use the SRO threshold calculator to determine the impact of the phase-out mechanism if total Australian wages exceed AUD 3,000,000.
Sources
- State Revenue Office Victoria: Payroll tax annual reconciliation and changes to threshold
