ACT payroll tax obligations, registration, lodgement and payment deadlines

If your business employs staff in the ACT and your wages bill is growing, ACT payroll tax will eventually become your obligation. It is a territory tax on the wages you pay employees and contractors, collected by the ACT Revenue Office. It sits alongside, but is separate from, Commonwealth obligations such as PAYG withholding and superannuation guarantee.

Once your total Australian taxable wages cross the ACT threshold, you take on three recurring duties: register with the ACT Revenue Office, lodge monthly returns and pay the tax, and complete an annual reconciliation after 30 June. Miss a date and penalty tax and interest start accruing on top of the tax itself. This guide sets out who the obligation captures, the thresholds that bring you into the system, each duty and its deadline, what counts as taxable wages, and what happens if you get it wrong.

Who has to deal with ACT payroll tax

The trigger is a combination of two things. You must be paying taxable wages in the ACT, and your total Australian taxable wages must exceed the ACT tax-free threshold.

The numbers that matter for the current financial year are:

Annual threshold: $1.75 million in total Australian taxable wages, reduced from $2 million on 1 July 2026.
Monthly threshold: $145,833.33, which is the annual figure divided across the year. The monthly figure drives registration and monthly lodgement.
General rate: 6.75% for employers with national wages below $20 million. The rate is 6.85% for employers with national wages between $20 million and $50 million, with higher tiers for the largest employers.
Grouping: if your business is part of a group of related entities, the group's combined Australia-wide wages count towards the threshold, and only one member, the designated group employer, can claim the threshold.
Contractors: payments under some contractor arrangements count as taxable wages through the "relevant contracts" rules, so contractors can pull you over the threshold even without employees.

The threshold is not all or nothing. You are taxed only on the amount of ACT taxable wages above your entitlement to the tax-free threshold, and that entitlement is proportioned. If you were only liable for part of the financial year, the threshold is reduced to reflect the days you paid wages. If you pay wages in more than one state or territory, the threshold is further reduced to the ACT share of your Australia-wide wages.

The ACT Revenue Office sets the rate and threshold each year by determination, and they change. Before relying on any figure, check the current year's settings on the ACT Revenue Office payroll tax pages.

Register within seven days of crossing the monthly threshold

The first duty is registration, and it has a short window. Under s 86 of the Payroll Tax Act 2011 (ACT) (the Act), if your total taxable wages paid anywhere in Australia, or your group's combined total, exceeds the monthly threshold in a month, you must apply to register as an employer within 7 days after the end of that month.

In practice this means that if your Australia-wide wages for a month are more than $145,833.33 and you are not already registered, the application is due by the 7th of the following month. The obligation to register applies from the month you cross the line, even if you think the year as a whole might come in under the annual threshold. The annual reconciliation later sorts out the correct final liability, but registration is judged month by month.

You register through the online registration form, and you must also declare your employer status. If you are part of a group, the members nominate a designated group employer (DGE) to claim the threshold, and the DGE may apply to lodge joint returns on behalf of other group members. Declaring the wrong status, or leaving group members off the application, can lead to underpayment of tax and, in turn, penalty tax and interest.

Lodge and pay monthly returns by the 7th

Once you are registered, or required to be registered, you must lodge a monthly return for every month except June. Section 87 of the Payroll Tax Act 2011 (ACT) requires the return within 7 days after the end of each month, and the ACT Revenue Office applies that as follows:

July to November and January to May: return due by the 7th of the following month.
December: return due by 14 January, to allow for the Christmas shutdown period.
June: no separate monthly return. June wages are included in the annual reconciliation return instead.
Weekends and public holidays: if a due date falls on a weekend or public holiday, lodgement and payment move to the next working day.

The return is lodged through the ACT Revenue Office's Self Service Portal, and the payroll tax for the month is paid at the same time, by electronic funds transfer, BPAY or direct debit. The portal calculates the tax for you based on the wages figures you enter and your employer status, so the practical task each month is having accurate figures ready.

If lodging monthly is genuinely onerous for your business, you can apply to the Commissioner for ACT Revenue to vary the lodgement period under s 87A of the Act. The Revenue Office will consider a variation where your anticipated annual ACT payroll tax liability is $80,000 or less, or where your circumstances otherwise justify it. A variation must be applied for in writing, and it does not remove the underlying obligation to pay the tax.

File the annual reconciliation by 28 July

The annual reconciliation is the year-end clean-up. Under s 87(2)(b) of the Payroll Tax Act 2011 (ACT), the return covering June and the adjustment of payroll tax for the financial year must be lodged within 28 days after the end of June, which means by 28 July each year.

The annual return does more than capture June wages. It is where you declare the correct full-year figures: total ACT taxable wages, the group's Australia-wide wages, your employer status, and your entitlement to the tax-free threshold for the period you were actually liable. The return adjusts the threshold automatically based on the days you paid wages during the year, so if you crossed the threshold part-way through the year, or claimed or did not claim the threshold in your monthly returns, the reconciliation sets the final position.

Any additional tax calculated in the annual return is due when the return is lodged, by 28 July. If you overpaid during the year, the reconciliation produces a credit position rather than a payment. Either way, the 28 July date is fixed in the legislation and does not move with the tax year; the only flexibility is the weekend and public holiday rule that applies to all lodgement dates.

Work out your taxable wages correctly

Payroll tax is not just about base salaries. The definition of wages in s 13 of the Payroll Tax Act 2011 (ACT) is deliberately broad, and getting it wrong is the most common source of underpayment. Taxable wages include:

Ordinary wages: wages, remuneration, salary, commission, bonuses and allowances paid or payable to an employee.
Director remuneration: amounts paid by a company to or in relation to its directors.
Superannuation contributions: employer super contributions, including salary sacrifice amounts, count as wages under s 17 of the Act.
Fringe benefits: the grossed-up taxable value of fringe benefits is included as wages under ss 14-15, calculated by reference to the fringe benefits tax rate.
Other payments: grants of shares or options to employees or directors in connection with their services, termination payments, and the excess of motor vehicle allowances over the exempt component can all form part of taxable wages, subject to the Act's specific rules.

The contractor provisions add another layer. Payments under a "relevant contract", broadly a contract for the performance of work or the supply of services, are treated as wages (excluding GST) unless an exemption applies. The main exemptions, set out by the ACT Revenue Office, cover contracts where the supply of goods is the primary purpose, services that are not ordinarily required and are provided by a contractor who supplies them to the public generally, owner-drivers delivering goods in their own vehicles, and contractors carrying on a genuine independent business who ordinarily provide services to the public. That last exemption requires an application to the Commissioner. If a relevant contract mixes labour and non-labour components, flat deduction rates may apply to strip out the materials or equipment component, depending on the contractor's trade.

If you operate across state and territory borders, apportionment matters. Payroll tax is generally payable in the jurisdiction where the work is performed, and your ACT taxable wages are the wages attributable to work performed in the ACT. Your entitlement to the ACT threshold is then scaled down to the ACT proportion of your Australia-wide wages, so multi-state employers should keep records of where each employee actually performs work.

What happens if you miss a due date

The consequences are set out in the Taxation Administration Act 1999 (ACT) (the TAA), and they apply to any tax default, including a late return, a late payment, or an underpayment that comes to light later:

Penalty tax: under s 31 of the TAA, the base penalty is 25% of the amount of tax unpaid. It can be increased to 50% where the default involved delaying payment or information, providing incorrect or misleading information, or is a second or subsequent default. It can rise to 75% for intentional disregard of the law, and up to 90% in the most serious cases. Voluntary disclosure before the Commissioner starts an investigation can reduce the penalty.
Interest: under s 25 of the TAA, interest accrues daily on unpaid tax from the end of the last day for payment until it is paid, at the prescribed rate. For the second half of 2026 the rate for overdue debts is 12.43% per annum, and it is adjusted every six months, so the figure will move.
Offences: failing to lodge a required return is an offence under s 67 of the TAA, carrying a maximum of 50 penalty units, although in practice the Revenue Office deals with most failures through penalty tax and interest rather than prosecution.
Follow-up: late lodgement can trigger compliance action, including audits, and tends to surface other problems in the payroll, such as misclassified contractors or incorrect group reporting.

If you have missed a deadline, lodge and pay as soon as you can, keep records of what you did, and consider a voluntary disclosure. If genuine extenuating circumstances caused the default, the Commissioner has power to remit or reduce penalty tax and interest.

A checklist for each lodgement

Before each monthly return, and again before the annual reconciliation, run through this list:

Confirm the current settings: check the current year's threshold, rate and any tier that applies to your group's Australia-wide wages.
Reconcile the month: make sure payroll data is final, including allowances, bonuses, commissions, super contributions and any fringe benefits for the period.
Review contractor payments: identify relevant contracts, check whether an exemption or a flat deduction rate applies, and document the reasoning.
Check cross-border wages: confirm the apportionment of wages between the ACT and other jurisdictions, and where each employee performed work.
Lodge and pay on time: submit the return in the Self Service Portal by the 7th (or 14 January for December) and make payment at the same time.
Keep working papers: retain the reports and calculations behind each return so the annual reconciliation is straightforward to complete.

When to get professional help

Most small businesses can manage monthly lodgement with accurate payroll software and the portal's built-in calculations. Professional advice earns its keep at the edges. Consider speaking to a lawyer or tax adviser where:

your structure involves multiple entities, trusts or a franchise, because group membership, the designated group employer nomination and the applicable rate tier all depend on how the group is structured;
you engage contractors in arrangements that look like employment, because the relevant contracts rules are broad and the exemptions are fact-sensitive;
you have employees working in more than one state or territory, so nexus and apportionment questions arise;
you have missed a deadline or discovered an underpayment, because the way a disclosure is made affects whether penalty tax is reduced or remitted; or
you want to apply for a variation of lodgement period or a contractor exemption determination.

A practitioner can map your structure against the grouping rules, review contractor agreements, prepare the application to nominate a designated group employer, and handle penalty remission and objection processes if the Commissioner assesses penalty tax you consider unfair.

The deadline that catches most ACT employers out

The seven-day registration window is the obligation most often missed. Employers tend to fixate on the monthly lodgement date and the 28 July reconciliation, but the registration clock starts running the moment a single month of Australia-wide wages exceeds $145,833.33, and it runs out within a week of that month ending. Register late and you are on the back foot from the start, because returns were technically due for every month from the one in which you crossed, with penalty tax and interest on each of them.

The risk is growing. The threshold dropped from $2 million to $1.75 million on 1 July 2026, which pulls more businesses into the system than ever before, and a business that was comfortably under the old threshold may already have crossed the new one without noticing.

Do this in the next week: compare your most recent month of Australia-wide wages, including bonuses and contractor payments, against the $145,833.33 monthly threshold. If you are over and not registered, apply today. If you are registered, put the 7th of each month and 28 July into your finance calendar now, and confirm with the ACT Revenue Office which rate and threshold apply to your group for the current financial year.