Calculating the mental health levy
The mental health levy thresholds are based on annual Australian taxable 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.
1. Calculate for more than $10 million (primary threshold)
(Queensland taxable wages – primary threshold) × primary rate
($112,000,000 − $10,000,000) × 0.25%
= $102,000,000 × 0.25%
= $255,000
2. Calculate for more than $100 million (additional threshold)
(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
Transitional period
For the 2022–23 financial year, the thresholds were adjusted to accommodate the levy commencing during the financial year.
| Australian taxable wages (1 January to 30 June 2023) |
Levy rate (applied to Qld taxable wages exceeding the thresholds) |
|---|---|
| Up to $5 million | Nil |
| More than $5 million (primary threshold) | 0.25% (primary rate) |
| More than $50 million (additional threshold) | 0.25% (primary rate) + 0.5% (additional rate) |
Company B is not a member of a group, employs in Queensland only and paid $80 million in taxable wages between 1 January and 30 June 2023. This is how the mental health levy was calculated.
1. Calculate for more than $5 million (primary threshold)
(Queensland taxable wages − primary threshold) × primary rate
($80,000,000 − $5,000,000) × 0.25%
= $75,000,000 × 0.25%
= $187,500
2. Calculate for more than $50 million (additional threshold)
(Queensland taxable wages – additional threshold) × additional rate
($80,000,000 − $50,000,000) × 0.5%
= $30,000,000 × 0.5%
= $150,000
3. Add steps 1 and 2 to get total annual mental health levy liability
$187,500 + $150,000 = $337,500
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 expects to pay $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.
1. Apportion wages to calculate the adjusted primary threshold
(Queensland wages ÷ Australian 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.
1. Apportion wages to calculate the adjusted primary threshold
(Total group Queensland wages ÷ total group Australian 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 taxable wages for the 2023–24 financial year.
In July 2023, Company A paid $3 million in Queensland taxable wages. This is how the mental health levy will be calculated in their July monthly return.
1. Apportion estimated wages to calculate the adjusted primary threshold
(Estimated Queensland wages ÷ estimated Australian wages) × primary threshold
= ($20,000,000 ÷ $80,000,000) × $10,000,000
= $2,500,000 (adjusted primary threshold)
2. Apportion estimated wages to calculate the adjusted additional threshold
(Estimated Queensland wages ÷ estimated Australian 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
= $2,500,000 ÷ 12
= $208,333
4. Calculate the additional periodic threshold
Adjusted additional threshold ÷ number of return periods in financial year
= $25,000,000 ÷ 12
= $2,083,333
5. Calculate the primary periodic levy liability for July 2023
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 2023
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 2023
$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 2023–24 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 2023. This is how the mental health levy is calculated.
1. Apportion wages to calculate adjusted primary threshold
(Company A wages ÷ total group wages) × primary threshold
= ($12,000,000 ÷ $20,000,000) × $10,000,000
= $6,000,000 (adjusted primary threshold)
2. Calculate primary periodic threshold for monthly return
Adjusted primary threshold ÷ number of months in period
= $6,000,000 ÷ 12
= $500,000 (primary periodic threshold)
3. Apportion wages to calculate adjusted additional threshold
(Company A wages ÷ total group 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 months in period
= $60,000,000 ÷ 12
= $5,000,000 (additional periodic threshold)
5. Calculate Company A’s levy for July 2023
(Monthly wages − primary periodic threshold) × primary rate
= ($600,000 − $500,000) × 0.25%
= $100,000 × 0.25%
= $250 (mental health levy liability for July 2023)
The additional levy rate does not apply to Company A because its wages are below the additional periodic threshold of $5,000,000.
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.
For the transitional period (1 January to 30 June 2023), refer to the transitional period information and example above.
Company D employs in Queensland only and stops employing on 5 December 2023. It had been employing since before the start of the financial year and was liable to pay $4,200,000 in wages for 158 days of the year (1 July to 5 December 2023).
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.