ACT Payroll Tax Calculation Methods for High-Wage Employers

Payroll Tax Amendment Bill 2025

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Introduced by: The Hon Chris Steel MLA (ALP) — Minister       , Minister for Heritage, Minister for Planning and Sustainable Development, Minister for Transport, Treasurer

Links to official parliament websites

Official page: progress through parliament

Effects of this bill

If this bill passes, it means that:

Employers who pay more than $150 million in total wages per year must use a new calculation method for payroll tax during the 2025-2026 financial year.
The payroll tax rate for these high-wage employers is 7.85% from 1 July 2025 to 31 December 2025; it rises to 8.75% from 1 January 2026 to 30 June 2026.
Different formulas determine the tax amount depending on whether the employer is an individual entity or part of a group.
The Australian National University, University of Canberra, University of New South Wales, Charles Sturt University, and Australian Catholic University are exempt from these high-wage payroll tax rules.

The Debate

What different members said when this bill was debated:

Chris Steel ALP

“I move: That this bill be agreed to in principle. I rise to introduce the Payroll Tax Amendment Bill 2025. This bill will enable the previously announced payroll tax changes from 1 January 2026, following an agreement with members of the Assembly following the delivery of the 2025-26 ACT budget. Payroll tax liability is ordinarily calculated using schedules 1 and 2 of the Payroll Tax Act 2011.”

Official source →

Ed Cocks LIB

“The Canberra Liberals will not be supporting the Payroll Tax Amendment Bill 2025. Let us be very clear about what we are looking at here, because this bill is not about good economic management, and it is not about tax reform. It is certainly not about any sort of vision for the future of Canberra’s economy.”

Official source →

Jo Clay GRN

“Today’s bill is the result of Greens advocacy. On 6 June this year, we launched our policy for a big corporations tax to protect essential services in the budget. We did that in the light of the Labor government racking up a $387 million overspend on the health budget and indicating that they would need to make “tough decisions” to manage future spending.”

Official source →

James Milligan LIB

“I was not originally going to speak in this part of the debate, but I think it is important to clarify a couple of things that Ms Clay has said. It is important that weindicatehereexactlywhat thecommittee’s recommendationwas.”

Official source →