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 to the levy for part of the financial year.
Where more than one 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 the annual mental health levy liability
$255,000 + $60,000 = $315,000
Transitional period
For the 2022–23 financial year, the thresholds are 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 pays $80 million in taxable wages between 1 January and 30 June 2023. This is how the mental health levy will be 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
Grouped employers
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.
The designated group employer (DGE) is the only member responsible for reconciling the mental health levy for the group in their annual return.
Company A is part of a group (with Company B) that employs in Queensland only and lodges periodic returns monthly. 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.
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 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.
Company A is part of a group (with Company B) and has employees in Queensland and Victoria. In the 2023–24 financial year the group expects to pay $125 million in Australian taxable wages—$18 million in Queensland and $107 million interstate:
- $12 million in Queensland (Company A)
- $6 million in Queensland (Company B)
- $107 million in Victoria (Company A).
The steps below demonstrate how the annual mental health levy is calculated for Company A. The same steps would be used to calculate the liability for Company B.
1. Apportion wages to calculate the group’s adjusted primary threshold
(Total group Queensland wages ÷ total group Australian wages) × primary threshold
= ($18,000,000 ÷ $125,000,000) × $10,000,000
= $1,444,000 (group adjusted primary threshold)
2. Apportion wages to calculate the group’s adjusted additional threshold
(Total group Queensland wages ÷ total group Australian wages) × additional threshold
= ($18,000,000 ÷ $125,000,000) × $100,000,000
= $14,440,000 (group adjusted additional threshold)
3. Apportion wages to calculate Company A’s primary threshold
(Company A’s Queensland wages ÷ total group Queensland wages) × group adjusted primary threshold
= ($12,000,000 ÷ $18,000,000) × $1,444,000
= $960,000 (Company’s A primary threshold)
4. Apportion wages to calculate Company A’s additional threshold
(Company A’s Queensland wages ÷ total group Queensland wages) × group adjusted additional threshold
= ($12,000,000 ÷ $18,000,000) × $14,440,000
= $9,600,000 (Company’s A additional threshold)
5. Calculate Company A’s primary levy liability
(Company A’s Queensland wages − adjusted primary threshold) × primary rate
= ($12,000,000 − $960,000) × 0.25%
= $11,040,000 × 0.25%
= $27,600 (primary levy liability)
6. Calculate Company A’s additional levy liability
(Company A’s Queensland wages − adjusted additional threshold) × additional rate
= ($12,000,000 − $9,600,000) × 0.5%
= $2,400,000 × 0.5%
= $12,000 (additional levy liability)
7. Add Company A’s primary and additional levy liabilities
The annual mental health liability for Company A is the total of their primary and additional levy liabilities.
= $27,600 + $12,000
= $39,600 (Company A’s annual mental health levy liability)
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 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.
- Find a payroll tax webinar or information session.