New 8.75% rate applies to employers with Australia-wide wages exceeding $150 million from 1 January 2026
At People2.0, keeping our partners informed and prepared is our top priority. With this in mind, we are bringing to your attention a recent legislative update affecting payroll tax in the Australian Capital Territory that may have implications for large employers operating in this region.
Understanding the Legislation
Overview
Beginning 1 January 2026, employers with annual Australia-wide wages over $150 million must pay ACT payroll tax at a rate of 8.75%. This change comes from the Payroll Tax Amendment Bill 2025, which the ACT Government proposed on 30 June 2025, introduced to the Legislative Assembly on 3 September 2025, and passed on 4 December 2025.
Key Provisions
New tax rate: From 1 January 2026, employers with annual Australia wide wages exceeding $150 million will be subject to 8.75% payroll tax on ACT taxable wages, with no additional surcharge. This represents an increase from the previous 6.85% plus a 1% surcharge, which was applicable from 1 July 2025 to 31 December 2025. Tax rates for other wage brackets are:
Payroll Tax Rates: 1 January 2026 to 30 June 2026
| Annual Australia-wide wages | General rate | Surcharge rate |
| $2M – $50M | 6.85% | 0% |
| $50M – $100M | 6.85% | 0.5% |
| $100M – $150M | 6.85% | 1.0% |
| Over $150M | 8.75% | 0% |
Group provisions: For employers who are members of a group, the threshold is based on the total taxable wages and interstate wages paid by the entire group.
Future Changes from 1 July 2026
The ACT Revenue Office has announced additional payroll tax changes taking effect from 1 July 2026 as per the table below:
Payroll Tax Rates: 1 July 2026 to 30 June 2027
| Annual Australia-wide wages | General rate |
| $1.75M – $20M | 6.75% |
| $20M – $50M | 6.85% |
| $50M – $100M | 7.35% |
| $100M – $150M | 7.85% |
| Over $150M | 8.75% |
What It Means for You
Impact
Employers with annual Australia-wide wages below $150 million will not be impacted by the new tax rate. The Payroll Tax Self-Service Portal will automatically calculate payroll tax at the applicable rate, based on figures declared in your returns.
For People2.0 Partners
For People2.0 partners, we will be adding the increased payroll tax to invoiced amounts for applicable placements.
Navigating Compliance Together
Managing payroll tax obligations across Australian jurisdictions can be complex, especially for businesses with workers in multiple jurisdictions. People2.0 helps talent suppliers and employers stay compliant with evolving regulations so you can focus on your core business.
If you have questions about how this change affects your situation, or if you’d like to learn how People2.0 can support your workforce compliance needs in Australia, we would welcome the conversation. Reach out to learn how we can simplify compliance for your business.
Looking Ahead
Staying proactive and informed about legislative changes like the Labour Hire Licensing (Scope of Act) Amendment Act 2025 is essential for business success. By understanding these requirements now, you can position your organisation to remain compliant and competitive as the regulatory landscape evolves.
For more information on the reforms, visit the YourSAy consultation page for background materials, or the Consumer and Business Services SA website for the latest updates on commencement timing.
Source: Payroll Tax Amendment Act 2025 (A2025-38), ACT Legislation Register
Additional Resource: ACT Revenue Office – Changes for 2025-26
Disclaimer: The information provided in this update does not, and is not intended to, constitute legal advice; rather, all information, content, and materials available here are for general informational purposes only. Information in this update is not intended to be comprehensive and may not constitute the most up-to-date legal or other information. This update contains links to other third-party websites. Such links are only for the convenience of the reader; People2.0 does not recommend or endorse the contents of the third-party sites. Readers of this update should contact their attorney or tax advisor to obtain advice with respect to any particular legal or tax matter. No reader should act or refrain from acting on the basis of information herein without first seeking professional advice in the relevant jurisdiction. Use of, and access to, this update or any of the links or resources contained within do not create an attorney-client relationship between the reader and People2.0.
