Payroll tax for employees working in multiple states
Learn how to identify when you need to include interstate wages in your tax return.
All wages paid to an employee for a month’s service are taxable in 1 jurisdiction (state or territory). This is known as the ‘nexus provisions’ or ‘nexus rules’.
The nexus rules began on 1 July 2009 by amendment to the Payroll Tax Act 1971 and they identify the jurisdiction in which to declare wages for payroll tax, to prevent double-taxing (i.e. charging tax in more than one jurisdiction).
Read the public ruling on payroll tax nexus provisions (PTA039) for more information.
The table below explains when wages are taxable in Queensland under the nexus provisions, from 1 July 2009.
If identified as taxable in Queensland below, include these payments when calculating your taxable wages.
When you lodge your:
- periodic return, include these payments as part of your Queensland taxable wages
- annual return, include payments that are taxable in Queensland in the corresponding fields that account for your Queensland taxable wages.
If not identified as taxable in Queensland, when you lodge your annual return, include:
- payments that are taxable in another state or territory, in the ‘Total interstate wages’ field as part of your interstate wages
- payments that are not taxable, in the ‘Other non-taxable payments’ field as part of your Queensland non-taxable wages.
Nexus rules
| Type | Liability |
|---|---|
| Wages paid or payable for services performed entirely in Queensland | Taxable in Queensland |
| Wages paid or payable in Queensland for entire overseas employment—up to 6 months | Taxable in Queensland |
| Wages paid or payable in Queensland for entire overseas employment—more than 6 months | Not taxable if the employment is in another country for a continuous period of longer than 6 months
The 6-month period starts on the date of the first wage payment for the overseas service |
| Wages paid or payable in Queensland for services performed in more than 1 state or territory | Apply the 4-tiered tests to determine whether wages are taxable in Queensland. Consider each tier in the following sequence:
If you determine that wages are taxable in Queensland at the first tier (i.e. the employee’s principal place of residence is in Queensland), for example, you don’t need to continue with the remaining tiers. Paragraphs 10–19 of Public Ruling PTA039 explain how the tiers are applied. Alternatively, use the taxable wages interactive help. |
Taxable wages interactive help
Use the interactive help below to work out if wages for a given month are taxable in Queensland.
Beside each question, you’ll see the section of the Payroll Tax Act that applies.