What employers and staffing firms operating in the Northern Territory need to know about the new 6.5% rate
Written by Isabella Styles, Legal Assistant, APAC | Legal review by Sabah Khan, Chief Legal Officer, APAC | Edited by Jeremiah Akin, Senior Manager Global Brand and Content
The Northern Territory Government has announced a change to its payroll tax rate, effective 1 July 2026. For employers operating in the NT with large Australian workforces, this update changes what you owe starting the new financial year. At People2.0, keeping our partners informed about changes like this is part of how we help you stay ahead of compliance requirements across the regions where you operate. If your business employs workers across Australia, here is what you need to know.
What Changed
On 6 May 2026, the NT Government announced a new, higher payroll tax rate for large employers. Starting 1 July 2026, employers with Australia-wide wages of $100 million or more will be subject to a 6.5% payroll tax rate in the Northern Territory. Employers below that threshold will continue to pay the existing rate of 5.5%.
The $2.5 million annual threshold and existing deduction settings remain unchanged.
Who the New Rate Applies To
The 6.5% rate applies to:
- An employer whose Australia-wide wages reach $100 million or more in a financial year.
- An employer that is part of a payroll tax group where the group’s combined Australia-wide wages reach $100 million or more in a financial year.
That second point is important. If you belong to a payroll tax group, the $100 million threshold is assessed at the group level, not at your individual business level. Even if your own wages fall below $100 million, you may still be liable at the higher rate if your group’s combined wages meet or exceed that amount. The existing grouping rules under Part 5 of the Payroll Tax Act 2009 continue to determine whether employers are grouped and how group liabilities are administered.
What Stays the Same
Not everything is changing. The following remain in place:
- The 5.5% payroll tax rate for employers and groups below the $100 million threshold.
- The $2.5 million annual threshold.
- Existing deduction settings.
- Current grouping rules under Part 5 of the Payroll Tax Act 2009.
- The monthly return, annual return, and annual adjustment framework.
How Monthly Returns Work Under the New Rate
Employers do not wait until year-end to apply the higher rate. The NT Government expects employers to apply the 6.5% rate in monthly returns throughout the year if they expect their Australia-wide wages, or their group’s, to reach $100 million or more for that financial year.
Prior-year wage history can serve as a baseline, though employers can provide a current-year estimate instead. Any overpayment or underpayment is reconciled through the annual adjustment in the June annual return.
If circumstances change during the year, such as an employer joining or leaving a payroll tax group, each relevant period is assessed separately. In those cases, the $100 million threshold applies as a fixed amount to each period and is not prorated.
What This Means for Your Business
The 6.5% rate will not affect most small and mid-sized businesses directly. If your business operates independently and your Australia-wide wages fall below $100 million, your rate stays at 5.5%. Nothing changes for you on that front.
However, there is one scenario worth looking at carefully: if your business is part of a larger corporate group, the threshold is assessed at the group level. That means your individual wages could be below $100 million and you could still be subject to the higher rate if your group’s combined Australia-wide wages meet or exceed that amount. If you are part of a group structure, it is worth confirming how the grouping rules apply to your situation before 1 July 2026.
For larger enterprise organisations, particularly those in technology, professional services, manufacturing, or other sectors with substantial Australian workforces, the $100 million threshold is a real and immediate question. Businesses in this range should be reviewing their expected Australia-wide wages now, not at year-end.
That urgency has a practical reason. The higher rate is meant to be applied during the year in monthly returns, not reconciled after the fact. Employers who expect to meet the threshold should already be applying 6.5% in their monthly filings. Prior-year wages can serve as your starting point, but if your workforce has grown or your circumstances have changed, a current-year estimate is the more accurate approach. Any difference gets reconciled through the annual adjustment in June, but the time to act is before the new financial year begins on 1 July 2026.
Stay Ahead of Compliance Changes
Payroll tax rules vary across Australia’s states and territories, and they can change quickly. Keeping up with those changes takes time and expertise that many businesses would rather put toward growth.
At People2.0, staying current on workforce compliance changes across 130+ countries is what we do. If you have questions about how this update may affect your operations, we’re ready and waiting to support you. Let’s connect!
The information provided in this post does not, and is not intended to, constitute legal advice; rather, all information, content, and materials are for general informational purposes only. This post may not reflect the most up-to-date legal or other information. Readers should contact their attorney to obtain advice with respect to any particular legal matter. Use of, and access to, this post or any links contained within do not create an attorney-client relationship between the reader and People2.0.
