Calculating the mental health levy
Learn about the mental health levy thresholds and how the levy is applied to Queensland wages.
The mental health levy thresholds are based on annual Australian taxable wages, being the total amount of Queensland taxable wages and interstate wages. The levy is then applied proportionately to Queensland taxable wages that exceed the thresholds.
| Australian taxable wages (annual) |
Levy rate (applied to Qld taxable wages exceeding the thresholds) |
|---|---|
| Up to $10 million | Nil |
| More than $10 million (primary threshold) |
0.25% (primary rate
|
| More than $100 million (additional threshold) |
0.25% (primary rate) + 0.5% (additional rate
|
The thresholds are adjusted if you:
- are a member of a group
- pay interstate wages
- are only liable for the levy for part of the financial year.
Where more than 1 of these circumstances apply, multiple adjustments are needed. These adjustments are made automatically when you lodge returns through QRO Online.
Company A is not a member of a group, employs in Queensland only and pays $112 million in taxable wages in the 2023–24 financial year. This is how the mental health levy will be calculated in the annual return.
(Queensland taxable wages – primary threshold) × primary rate
($112,000,000 − $10,000,000) × 0.25%
= $102,000,000 × 0.25%
= $255,000
(Queensland taxable wages − additional threshold) × additional rate
($112,000,000 − $100,000,000) × 0.5%
= $12,000,000 × 0.5%
= $60,000
3. Add steps 1 and 2 to get total annual mental health levy liability
$255,000 + $60,000 = $315,000
Interstate wages
If you pay interstate wages, the mental health levy thresholds are adjusted for the Queensland portion of your Australian taxable wages.
Company C is not a member of a group and has employees in Queensland and New South Wales. In the 2023–24 financial year it paid $16 million in Australian taxable wages:
- $4 million in Queensland
- $12 million in New South Wales.
The threshold is calculated for the Queensland portion of taxable wages.
(Queensland taxable wages ÷ Australian taxable wages) × primary threshold
= ($4,000,000 ÷ $16,000,000) × $10,000,000
= $2,500,000 (adjusted primary threshold)
2. Calculate the annual mental health levy
Portion of Queensland taxable wages above $2,500,000 × 0.25%
= ($4,000,000 − $2,500,000) × 0.25%
= $1,500,000 × 0.25%
= $3,750 (annual mental health levy liability)
The additional levy rate does not apply to Company C because its annual Australian taxable wages are below the $100 million additional threshold.
Designated group employers
The designated group employer (DGE) is the only member responsible for reconciling the mental health levy for the group in their annual return.
The levy will be calculated using the total group Queensland and interstate taxable wages paid for the year. The amount will be reconciled with the total combined periodic levy liability reported by each member of the group throughout the financial year.
Group members must provide the DGE with their combined periodic levy liabilities for the financial year.
Company A is part of a group (with Company B) that employs in Queensland and Victoria. Company A is the DGE. In the 2023–24 financial year the group collectively paid the following amounts in taxable wages:
- $27 million in Queensland
- $9 million in Victoria.
(Total group Queensland taxable wages ÷ total group Australian taxable wages) × primary threshold
= ($27,000,000 ÷ $36,000,000) × $10,000,000
= $7,500,000 (adjusted primary threshold)
2. Calculate the annual mental health levy
Portion of total group Queensland taxable wages above $7,500,000 × 0.25%
= ($27,000,000 − $7,500,000) × 0.25%
= $19,500,000 × 0.25%
= $48,750 (annual mental health levy liability)
The additional levy rate does not apply to Company A, as the group’s annual Australian taxable wages are below the $100 million additional threshold.
In their annual return, Company A will reconcile the annual mental health levy liability with the combined periodic levy liabilities of all group members that have been calculated throughout the year.
Reporting for periodic returns
The mental health levy thresholds in periodic returns are adjusted based on wage estimates for the financial year. Any Queensland taxable wages you report in your periodic returns that are above your calculated adjusted thresholds will be liable for the levy.
If you are a member of a group of employers, the mental health levy thresholds are calculated proportionately on the members’ combined annual Australian taxable wages.
Company A is not a member of a group, lodges monthly returns and estimates it will pay $20 million in Queensland taxable wages and $60 million in interstate wages for the 2024–25 financial year.
In July 2024, Company A paid $3 million in Queensland taxable wages. This is how the mental health levy will be calculated in their July monthly return.
(Estimated Queensland taxable wages ÷ estimated Australian taxable wages) × primary threshold
= ($20,000,000 ÷ $80,000,000) × $10,000,000
= $2,500,000 (adjusted primary threshold)
(Estimated Queensland taxable wages ÷ estimated Australian taxable wages) × additional threshold
= ($20,000,000 ÷ $80,000,000) × $100,000,000
= $25,000,000 (adjusted additional threshold)
3. Calculate the primary periodic threshold
Adjusted primary threshold ÷ number of return periods in financial year (12 periods for monthly lodgers, 2 for half-yearly)
= $2,500,000 ÷ 12
= $208,333
Adjusted additional threshold ÷ number of return periods in financial year (12 periods for monthly lodgers, 2 for half-yearly)
= $25,000,000 ÷ 12
= $2,083,333
5. Calculate the primary periodic levy liability for July 2024
Portion of Queensland taxable wages above primary periodic threshold × 0.25%
= ($3,000,000 − $208,333) × 0.25%
= $2,791,667 × 0.25%
= $6,979
6. Calculate the additional periodic levy liability for July 2024
Portion of Queensland taxable wages above additional periodic threshold × 0.5%
= ($3,000,000 − $2,083,333) × 0.5%
= $916,667 × 0.5%
= $4,583
7. Add steps 5 and 6 to get total mental health periodic levy liability for July 2024
$6,979 + $4,583= $11,562
Company A is part of a group (with Company B) that employs in Queensland only and lodges periodic returns monthly. Company A is the DGE.
At the start of the 2024–25 financial year, the group estimates they will collectively pay $20,000,000 in Queensland taxable wages:
- $12 million (Company A)
- $8 million (Company B).
Company A pays $600,000 in Queensland taxable wages for July 2024. This is how the mental health levy is calculated.
(Company A estimated taxable wages ÷ estimated total group taxable wages) × primary threshold
= ($12,000,000 ÷ $20,000,000) × $10,000,000
= $6,000,000 (adjusted primary threshold)
2. Calculate primary periodic threshold
Adjusted primary threshold ÷ number of return periods in financial year (12 periods for monthly lodgers, 2 for half-yearly)
= $6,000,000 ÷ 12
= $500,000 (primary periodic threshold)
(Company A estimated taxable wages ÷ estimated total group taxable wages) × additional threshold
= ($12,000,000 ÷ $20,000,000) × $100,000,000
= $60,000,000 (adjusted additional threshold)
4. Calculate additional periodic threshold
Adjusted additional threshold ÷ number of return periods in financial year (12 periods for monthly lodgers, 2 for half-yearly)
= $60,000,000 ÷ 12
= $5,000,000 (additional periodic threshold)
5. Calculate the mental health levy liability for July 2024
(Monthly taxable wages − primary periodic threshold) × primary rate
= ($600,000 − $500,000) × 0.25%
= $100,000 × 0.25%
= $250 (mental health levy liability for July 2024)
The additional levy rate does not apply to Company A because its July 2024 taxable wages are below the additional periodic threshold of $5,000,000.
Company A is part of a group with Company B. Both companies employ in Queensland and Victoria, and lodge periodic returns monthly. Company A is the DGE.
For the 2024–25 financial year:
- Company A estimates it will pay $49 million in Australian taxable wages.
- $6 million in Queensland
- $43 million in Victoria
- Company B estimates it will pay $51 million in Australian taxable wages.
- $6 million in Queensland
- $45 million in Victoria
- As a group, they estimate to collectively pay $100 million in Australian taxable wages.
- $12 million in Queensland
- $88 million in Victoria
Company A pays $600,000 in Queensland taxable wages for July 2024. This is how the mental health levy is calculated for Company A’s July periodic return.
(Primary threshold × (estimated total group Queensland taxable wages ÷ estimated total group Australian taxable wages)) × (Company A’s estimated Queensland taxable wages ÷ estimated total group Queensland taxable wages)
= ($10,000,000 × ($12,000,000 ÷ $100,000,000)) × ($6,000,000 ÷ $12,000,000)
= $1,200,000 × 0.5
= $600,000 (adjusted primary threshold)
2. Calculate the primary periodic threshold
Adjusted primary threshold ÷ number of return periods in financial year (12 for monthly lodgers, 2 for half-yearly)
= $600,000 ÷ 12
= $50,000 (primary periodic threshold)
(Additional threshold × (estimated total group Queensland taxable wages ÷ estimated total group Australian taxable wages)) × (Company A’s estimated Queensland taxable wages for employer ÷ estimated total group Queensland taxable wages)
= ($100,000,000 × ($12,000,000 ÷ $100,000,000)) × ($6,000,000 ÷ $12,000,000)
= $6,000,000 (adjusted additional threshold)
Adjusted additional threshold ÷ number of return periods in financial year (12 for monthly lodgers, 2 for half-yearly)
= $6,000,000 ÷ 12
= $500,000 (additional periodic threshold)
5. Calculate the primary periodic levy liability for July 2024
Portion of Company A’s periodic Queensland taxable wages above the primary periodic threshold × primary rate
= ($600,000 − $50,000) × 0.25%
= $1,375
6. Calculate the additional periodic levy liability for July 2024
Portion of Company A’s periodic Queensland taxable wages above the additional periodic threshold × additional rate
= ($600,000 – $500,000) × 0.5%
= $500
7. Add steps 5 and 6 to get total mental health periodic levy liability for July 2024
Primary periodic levy liability + additional periodic levy
= $1,375 + $500
= $1,875
Note: If your calculation for the additional periodic levy result is zero or less, then your additional periodic levy for the period is $0 and you are only liable to pay the primary periodic levy. If both the primary and the additional periodic levies are calculated to be zero or less, then your total periodic levy liability is $0.
Liable for only part of the year
If you were only liable for part of the financial year (e.g. you commenced or ceased employing during the year), the mental health levy thresholds are calculated on the number of days you paid—or were liable to pay—taxable wages.
Company D employs in Queensland only and stops employing on 5 December 2024. It had been employing since before the start of the financial year and was liable to pay $4,200,000 in taxable wages for 158 days of the year (1 July to 5 December 2024).
Apportion threshold to the number of days liable to pay taxable wages
(Days liable ÷ 365 days) × primary threshold
= (158 ÷ 365) × $10,000,000
= $4,328,767 (adjusted primary threshold)
Company D will not have to pay the mental health levy because its total taxable wages for the period (i.e. $4,200,000) were below their adjusted threshold.
Also consider…
- Read more about payroll tax rates and thresholds.
- Find out how to lodge and pay payroll tax returns.
- Learn about calculating the mental health levy in divisions 5A–C of the Payroll Tax Act 1971.