Non-grouped employers 2025 payroll tax annual return

Welcome to those that are new, and those that are returning for another year, to learn about the payroll tax annual return here in Queensland. My name is Roberto from the Queensland Revenue Office, and I will be delivering this video for you today with my colleague, Megan.

There were a few changes to payroll tax over the last year.

The GP exemption for payroll tax

From 1 December 2024, wages paid by a medical practice to a GP, either as a contractor or an employee, are exempt from payroll tax under an administrative arrangement. The previous GP amnesty was finalised on 30 November last year.

Regarding the current amnesty for contracted dentists

Dental clinics that are eligible for the amnesty are not required to pay payroll tax on payments made to contracted dentists up to 30 June 2025 and for the previous 5 years.

There is an administrative arrangement on our website that sets out the terms of the amnesty.

If you have paid wages to a GP that are exempt wages or have been advised by the Commissioner of State Revenue that you qualify for the payroll tax amnesty for contracted dentists, you will place these amounts in the non-taxable wage section of the annual return.

Regional employer discount

A further requirement was added to be eligible for the regional employer discount of 1%. From 1 July 2024, employer’s total taxable wages paid or payable must not be more than 350 million dollars for the year.

The information covered in this video is designed for taxpayers in Queensland and is governed by two main bodies of legislation: the Payroll Tax Act 1971 and the Taxation Administration Act 2001.

We’ll be covering a variety of topics in this video. The order of information has been designed to replicate the cycle of the annual return process—from what you need to know prior to lodging, to after you’ve lodged.

To make it easy, there are in the description below for each of these topics.

Our first topic to start us off is looking at some of the annual return basics such as the who, what and when for lodging your payroll tax obligations.

Some of the basics you will need to know for the annual return is that:

• The due date is 21 July. However, this may change if that date falls on a weekend. We are mindful that the due date for some of the other jurisdictions is different; however, it is important to mention that any lodgement or payment received after 21 July may be subject to interest and penalty tax.
• All lodgements for the annual return are to be made through our online platform, QRO Online.
• All clients that are registered for payroll tax in Queensland, including grouped members, must lodge an annual return. In Queensland, there is no single lodger like some of the other jurisdictions. All entities, including group members, must lodge their own annual return. This also includes registered clients that have taxable wages below 1.3 million for the financial year. You must lodge a return even if the payroll tax liability will be nil.
• The annual return generally reconciles wages for the full financial year unless a status change has occurred.

A common question we get asked by clients is ‘why a full year of wages is to be declared in the annual return if the periodic returns have already been paid for’. The answer is that the annual return acts as a reconciliation for the full financial year. If there are any discrepancies in your periodic returns compared to the annual return, then the annual return will calculate this. The prior periodic returns that have been lodged throughout the year are rolled up into the ‘Less total periodic amounts’ section, which is deducted from the payroll tax amount for the full financial year.

It is important to note that this ‘Less prior periodic amounts’ figure is the amount of payroll tax you have already declared for the year. It does not include any interest, penalty or mental health levy amounts you may have paid.

The final payroll tax liability or credit for payroll tax, is shown in the ‘Liabilities’ section of your annual return form, under the ‘Payroll tax liability/credit’ section.

If you wish to view a summary of the prior periodic payroll tax amounts for your annual return, you can go to the ‘Year-to-date’ returns tab and view the payroll tax assessed column.

Another common question we get asked is, ‘Do we have to lodge a separate periodic return for June?’

In Queensland, if you are a monthly lodger there is no periodic return for the month of June. And if you are a half-yearly lodger, there is no January to June periodic return. Instead, in most instances, employers will lodge an annual return covering the full financial year, which will capture the liability for your June wages.

If you are unsure what period of wages you must declare, the first page of your annual return will have a start and end date. Generally, this will be the full financial year; however, the dates may be different if you have had a change of status during this year. Therefore, it is always best to review these dates and provide wages for the period stated.

For employer statuses, there are 3 types in Queensland: non-grouped, and then grouped (which includes a group member) or the designated grouped employer.

On the slide, you can see the difference between a non-grouped entity and a grouped entity. If you have one ABN, but employ in multiple locations or interstate as well, this is still considered a non-grouped entity.

It is also important to note that for grouping, a business does not need to employ in Queensland to be considered grouped. Any relation, or connection, to another ABN may be sufficient grounds to be treated as one group for payroll tax purposes.

If a group of businesses meets the criteria for registration, then all members who have employees in Queensland must register for payroll tax. One member of the group becomes the designated group employer. Sometimes we refer to them as the ‘DGE’, and they are responsible for claiming the deduction on behalf of the group.

If grouping is something you would like more information on, our office conducts in-person events in Queensland throughout the year. If this is something that would interest you, you can follow Queensland Revenue Office on Eventbrite, or you can google ‘Queensland Revenue Office events’ and this first link should be for Eventbrite.

This slide summarises the reporting requirements for each employer status for the annual return.

As a non-grouped member, please make sure you have your Queensland taxable wages, Queensland non-taxable wages and interstate wages ready before you begin lodging your annual return.

The mental health levy will automatically reconcile in your annual return.

Note: if your status is changing from non-grouped to group member from 1 July, you must provide your new designated group employer your estimated Queensland and interstate taxable wages for the following financial year as this will be required in the first periodic return (which is July) for the financial year.

Group members must declare their Queensland taxable wages, Queensland non-taxable wages and interstate wages for the full financial year in their annual return, unless a change of status (for example, change of groups) has occurred.

If you changed groups throughout the financial year, you would only declare wages from the date you joined the group up to 30 June and provide the DGE your wages for the time you have been in the group.

Group members must also provide certain wage information to their DGEs for them to claim any deduction entitlement and reconcile the mental health levy on behalf of the group. The information you must provide your DGE are:

• Queensland taxable and non-taxable wages
• interstate wages
• your periodic mental health levy liability amounts as a member of the group; if you are unsure about your mental health levy liability, you can go into the ‘Year-to-date’ returns tab of QRO Online and view the mental health levy assessed column
• and, finally, your estimated Queensland and interstate taxable wages for the following financial year.

For the designated grouped employer, in the annual return, you will need to declare your own Queensland taxable wages, Queensland non-taxable wages and interstate wages for the full financial year or for the period of time you were the DGE.

In addition, you should have received the following information from your group members prior to lodging:

• each group member’s total Queensland taxable and interstate wages for the full financial year
• each group member’s total periodic mental health levy liability amounts
• and each group member’s estimated Queensland and interstate wages for the following financial year.

Once you have lodged your annual return, you will then need to provide each of your group members the group’s total estimated Queensland taxable and interstate wages for the following financial year. This information is required prior to the first periodic return of the new financial year. In most cases, if they are a monthly lodger, they will require this information for the July periodic return, which is due in early August.

If you changed groups throughout the financial year, you would only declare and provide the DGE your wages for when you were in the group.

For example, if you joined the group on the 1st of February 2025 and remained part of that group until 30th of June:

• You would declare in your annual return, and provide your DGE, the Queensland taxable and interstate wages for the period 1 February through to 30 June 2025.
• You would also provide your total periodic mental health levy liability amounts for the February–May 2025 returns if you lodge monthly.

In this section, we will look at some steps that you can take to make sure you are ready to lodge the annual return by the due date of 21 July.

The annual return must be lodged through QRO Online. To check if you have successfully set up your personal account and are ready to go, you should see the pictured tiles on your home page in QRO Online. If you can see these tiles, but are missing ‘View accounts’, you will need to contact us on 1300 300 734 to be linked to an existing payroll tax account.

We recommend logging in date to confirm that there is one administrator already linked to the entity in QRO Online.

To check if there is an administrator, click on View accounts from the home page. This will display all your clients for the respective revenue streams. To locate the contact client information of the administrator, click on Show administrator details from the right-hand side for a pop-up to appear.

If you cannot see a ‘View accounts’ tile but instead have a tile that reads ‘Identity verification’, this means you have not completed this step and we would recommend reviewing your personal details or checking that the primary and secondary identity documentation provided has been successfully verified.

If you don’t have Australian documents or cannot verify your 2 forms of ID, you can request manual verification. There is more information for this on our website.

Before you lodge, also make sure your contact details are correct and up to date in QRO Online. To check this, you will need to go to the ‘Manage details’ section located on the left-hand side menu of your QRO Online dashboard. The service address is where correspondence is sent to and the business address is the physical address of the business.

Make sure that you’ve lodged all your periodic returns before you lodge the annual return. If you have any outstanding periodic returns, these will display within the ‘Returns’ tab of QRO Online. You will not be able to lodge your annual return if you have outstanding periodic returns displaying.

Also, please check that your employer status is correct prior to lodging the annual return. If you are unsure of your employer status, you can refer to the dashboard of your QRO Online account or you can refer to your status on the first page of your annual return.

If you have identified you may need to change your employer status, this is known as the ‘change of status’ and can be done through a final return or annual return depending on the day the change occurred.

The Payroll Tax Act requires a change of status to be reported within 21 days of the change occurring. However, there can be multiple reasons for a change of status. Your business undergoes a change of status if:

• you become or stop being the designated group employer for a group
• you become or stop being a group member. (It is also worth mentioning that if your employer status remains the same but you change groups, this is also considered a change of status.)
• you stop employing in Australia and do not intend to employ for the rest of the year or next financial year
• an administrator (receiver and manager or liquidator) is appointed or ceases.

We’re just going to go through some common scenarios that clients often speak to the office about. It is important to remember—as we look at these scenarios—that when we say ‘entities’ or ‘businesses’, we’re referring to an individual ABN.

A scenario that may be considered a change of status:

• An entity is changing groups, but the employer status remains the same. For example, you could have one group member moving to another group as a group member because the board of directors and association with other ABNs has changed.
• Employees are being transferred to a new ABN and the current ABN will cease employing Australia-wide.
• The entity is no longer associated with other ABNs (could be the board of directors has changed) and the grouping provisions no longer apply. This is a status change because their employer status is changing from grouped to non-grouped.
• The business has gone into administration or had liquidators appointed. It is important to note that the appointment or ceasing of an administrator relates only to insolvency matters.

Alternatively, some scenarios that are not considered a status change:

• There is a change in tax accountants, financial officers or bookkeepers lodging for the company.
• The name of a business changes, but the ABN remains the same.
• The owners are changing. In this instance, it would be worth looking at the grouping provisions (for example, controlling interests) to see if this requires a change of status. If the owners are changing and the ABN remains the same, this in itself is not a status change.
• Lastly, a business has operations stopping in Queensland but continues to employ interstate or is continuing to employ in Queensland but will be under the threshold, .

If you haven’t ceased employing Australia-wide—however, you have either ceased employing in Queensland during the current financial year and will continue employing interstate or you (or your group) will not pay more than $25,000 of Australian taxable wages in any week in during the following financial year—then you still need to lodge your annual return. Once you have lodged your return, you can send us an email with your circumstances to request cancellation of your registration.

So, if you have identified that you need to change your status, we next need to determine when the change occurred.

If your status changed during the financial year and you have not lodged a final return for it, then you must complete a payroll tax final return in QRO Online prior to lodging your annual return

If the DGE or any other member of the group had a status change on or after 1 January 2023, the DGE must lodge a separate mental health levy final return to reconcile the mental health levy on behalf of the group.

The employer that had the status change should complete their annual return after lodging their payroll tax final return if you have continued to employ in Queensland after your status change.

To lodge a final return for a status change that occurred during the financial year, you can go to the ‘Returns’ tab in QRO online and click on the blue button Lodge final returns.

If you are changing status on 1 July, you can notify us in the annual return within the ‘Status change’ section.

The status change section in both the annual return form and the final return form looks like this. Depending on the change, there may be additional information requested. For example, if you are becoming a grouped member, you will be required to nominate your designated grouped employer.

If we have a look at an example of a status change, we have Green Pty Ltd changing their status from a DGE to GM on 1 February 2025.

In this instance, the client lodged their final return within the 21 days after the change of status.

The final return will reconcile wages for the period of 1 July 2024 to 31 January 2025 as the grouped employer. As their status was designated grouped employer, they are also required to lodge a mental health levy final return to reconcile the levy for this period of time. Due to Green Pty Ltd ceasing to be the DGE for the group, another member of the group employing in Queensland will need to lodge a payroll tax final return to become the new DGE of the group from the 1st of February 2025.

From 1st of February, Green Pty Ltd is now a group member of a different group.

In the annual return, they will be reconciling wages from 1st of February to 30th of June 2025 as the new employer status of group member. They will need to report their wages and levy payable to the new designated grouped employer for this period.

Our third phase of this video is looking at lodging the annual return. In this section, we will cover topics such as nexus provisions, Queensland taxable and non-taxable wages, regional employer discount, deduction, rates and mental health levy. To skip to the part that is relevant for you, please refer to the timestamps in the description box below.

The first common question that pops up around annual return time is ‘whether a wage or payment should be declared when it is paid or when it was due to be paid (or payable)’.

In accordance with the Payroll Tax Act, the answer is the earliest of the relevant months. For example, for employees that are paid monthly or earn commission, the work was payable in June; but due to the accounts or payroll system, may only get paid in July. In this instance, it would be declared in the annual return as it would be considered as June wages when the service or work was payable.

Before you start declaring your taxable wages, it is also worth checking if the wages should be declared here in Queensland. If you have employees that work in 2 or more states or territories in Australia, the nexus rules will help you determine which state or territory payroll tax is payable to.

The main determining factor will be where the work or service is performed.

If workers are performing their duties wholly in one jurisdiction in a month, that is where payroll tax is paid to. So, the first rule is pay payroll tax in the state where the work is wholly performed.

Where things get complex is when you have workers performing their duties across 2 or more states or territories in a calendar month. If this is the case, the nexus provisions have a 4-tiered test to work through to reach a determination. The 4-tiered test that you can see is on our website and within the legislation. If you can reach a determination at the first tier, you do not have to work through tiers 2, 3 or 4. You drop out of the test as soon as you can make a decision about where to pay the payroll tax.

If you have a worker and their employment has been in another country for a continuous period of longer than 6 months, these wages are not taxable.

To help simplify the nexus provisions, we have an interactive help on our website which will ask questions in line with the 4-tiered test to help make a determination on whether the wages are payable here in Queensland.

Now that we’ve determined if the wages are payable in Queensland for the annual return, we will look at which category they must be included in.

Unlike your periodic returns, the annual return requires you to break the wages down into the 10 separate categories listed in the return.

In a periodic return, you are required to declare your lump sum of Queensland taxable wages.

In the annual return, you must breakdown your Queensland taxable wages into the 10 categories. These 10 categories are added together to form your total Queensland taxable wages.

Any wages you list in the gross salary and wages, are not included again in the other categories. For example, we do not want superannuation declared in both the superannuation and gross salary and wages field as this would lead to a duplication in the total Queensland taxable wages.

It is important to note, in the ‘Queensland taxable wages’ where there is a breakdown of the categories, this is where you are declaring the taxable wages for one ABN. If you are a DGE, this should only include the wages for the ABN specified at the start of the form.

A ‘Group wages’ section will appear later on in the annual return form where you can enter the total Queensland taxable wages for all group members. That section should include the Queensland taxable wages for you as the DGE plus each of your group member’s Queensland taxable wages.

Similarly, for the total interstate wages for all group members, you should include the total interstate wages for you as the DGE plus each of your group member’s interstate wages. This includes any interstate group members that do not employ in Queensland.

We’re now going to delve briefly into the 10 different categories.

The first category that displays in your annual return is the gross salary and wages. These are generally taxable payments that don’t fall into the other categories such as annual leave, sick leave and long service leave. This is the total before any deductions (example PAYG income tax) have been applied.

As mentioned a little earlier, any wages that you declare in gross salary and wages should not be declared in any other category. For example, superannuation should not be declared in gross salary and wages but rather in the superannuation category of the annual return.

Allowances

Most allowances are taxable, for example, tool allowances, meal allowances, height allowances and first aid allowances.

The accommodation allowance and motor vehicle allowance have an exempt-from-payroll-tax component. Payments on these allowances are only taxable on the amount paid over the exempt amount.

An accommodation allowance is usually paid to an employee if they must spend a night away for business. For the current financial year, it is taxable on any amount over $318.90 per night. So, if accommodation is $350, they are exempt for $318.90 and should declare the $31.10.

The accommodation allowance can include meals and incidentals. However, if only a meals and incidentals allowance is paid to the employee, a different exempt rate may apply. This rate is pre-defined by the ATO.

A motor vehicle allowance is taxable over an amount of 85 cents per kilometre when an employee travels for business purposes in their own car.

Just a note about living-away-from-home allowance, even though it is called an ‘allowance’ you shouldn’t include it in the allowances section of the annual return. It is treated as a fringe benefit for payroll tax.

Bonuses and commissions

Bonuses and commissions are taxable for payroll tax and include things like performance and Christmas bonuses paid to employees. Commissions should be included in returns for the period in which the sale is settled or when the commission is paid. This is an instance of the paid or payable scenario we mentioned earlier.

Director fees are taxable whether they are paid to a working or non-working director, and it does not matter where the fees are paid to, for example, a director’s trust.

Superannuation

A superannuation contribution is any contribution paid or payable by an employer to a superannuation fund on behalf of an employee or director.

Superannuation contributions include monetary contributions (examples may be cash payments, electronic funds transfers) and non-monetary contributions, such as marketable securities, properties or the forgiveness of a loan). Super guarantee and pre-tax superannuation contributions are all taxable. These should be declared in the superannuation field of the annual return.

Salary sacrifice for fringe benefits (example, a car under a novated lease, payment of school fees or child-care costs) is taxable for payroll tax and you should declare them in the fringe benefits field of the return.

We should further note that exempt benefits (examples, a work-related laptop or portable computer) are not taxable for payroll tax.

Fringe benefits are defined under the Fringe Benefits Tax Assessment Act 1986. For payroll tax purposes, any fringe benefit exempt under the FBT Act is also exempt for payroll tax.

Exempt fringe benefits include car parking fringe benefits and certain types of entertainment benefits, known as tax-exempt body entertainment fringe benefits.

Fringe benefits are divided into type 1 and type 2 in the Fringe Benefits Tax Assessment Act. In the annual return, you must declare the type 2 grossed-up value of fringe benefits.

You should also ensure that any fringe benefit that relates to Queensland is apportioned to Queensland.

This is an example of the fringe benefit calculation for the payroll tax annual return.

A company called Green Pty Ltd declared type 1 and type 2 fringe benefits tax in their last fringe benefits tax return (example, for the period ended on 31 March 2025) and the aggregated type 1 and type 2 amount is $65,000. This aggregated amount will then need to be grossed up by the type 2 gross up factor of 1.8868 to get the fringe benefits tax amount for the current annual return. In this example, the fringe benefits tax amount that will need to be declared in the current annual return is $122,642.

Public ruling PTA003—Fringe benefits—has more information on declaring fringe benefits for payroll tax purposes if you’d like more information.

We will also look at how you can apportion your fringe benefits for Queensland.

If you employ in more than one state or territory, it may not be possible for you to identify state-specific elements of fringe benefits. We find that this is an area where people often over-declare. In these circumstances, the fringe benefit amount may be declared on an apportionment basis, calculated using the ratio of wages paid in particular states or territories.

For this example, we have a company that pays $2 million wages in Australia. They pay $1.5 million in annual wages in Queensland and $500,000 in wages in South Australia.

As you can see in the second pie chart, this equates to 75% in Queensland and 25% in South Australia. Based on this wages ratio, 75% of the fringe benefit may be declared in Queensland and 25% in SA.

If you would like more information on fringe benefits, you can refer to Public Ruling PTA003.

Termination payments

When an employee stops working, any additional amounts paid to them are taxable. Termination payments include unused annual leave, long service or sick leave, deferred or accrued wages, commissions, bonuses and death benefit payments.

It’s important to note that any termination payments that are genuine redundancy payments or early retirement schemes are generally exempt from payroll tax to the extent that they are exempt from income tax. The best rule to apply is that if employee does not pay income tax on the termination payment, then you do not have to pay payroll tax on it.

Now we’ll discuss contractors. Even though payments to contractors are not captured under the general definition of wages in the Payroll Tax Act, there are special provisions in the Act that can deem them to be wages.

The first thing you should consider is if the person performing the work is actually an employee. Our public puling PTA038—Determining whether a worker is an employee—will assist you in this. If the worker is determined to be an employee, then payroll tax applies and are captured under taxable wages.

If they are not an employee and determined a contractor, you should consider whether the person is engaged under a relevant contract and if there is a labour component in the contract. If a relevant contract does not exist, no payroll tax applies.

If a relevant contract does exist, you must consider whether one of the nine exemptions apply. Our website outlines each of the nine exemptions with helpful examples.

If none of the exemptions apply, the wages are subject to payroll tax; however, a partial deduction for the non-labour components (such as goods and materials) and GST can be excluded from the taxable wages.

If an exemption applies, payments are not subject to payroll tax. If exempt, these do not need to be declared in the annual return.

If you would like further assistance on contractors, there is an interactive help on our website which will ask you questions in line with the legislation to help you reach a determination on whether contractors are taxable in Queensland.

Shares and options

If shares and options have been granted to employees, contractors or company directors they are taxable for payroll tax. Shares and options not defined as an employee share scheme interest under the Income Tax Assessment Act 1997 may be a fringe benefit and may need to be included as fringe benefits in the annual return.

The value of any shares and options must be declared in the return period for the period in which the relevant day falls.

Wages comprising the grant of a share or option are taken to be paid or payable on the relevant day. You can choose either the grant day or the vesting day. The value of shares and options is either the market value on the relevant day that you have chosen or the value defined under the Income Tax Assessment Act.

If the value is not declared in the return period that includes the grant day, then the relevant day is automatically chosen to be the vesting day (or if it is not vested then 7 years after the day the share is granted).

After you have entered in your Queensland taxable wages in your return, you will be asked if you are a regional employer.

To be considered a regional employer, you must have:

• your principal place of employment in regional Queensland
• and you pay at least 85% of taxable wages to regional employees and for a return period after 30 June 2024, a regional employer is not entitled to a discount if they pay over $350 million annually or a pro-rata rate for a periodic return period.

Looking at the first dot point of the eligibility criteria, a principal place of employment is your registered business address as per the Australian business register. If you do not have an ABN, it is the place at which your principal state of business is located. This principal place of business must be located in one of the areas specified in the definition of regional Queensland.

Regional Queensland is defined as the following areas identified in the Australian Bureau of Statistics 2021 Statistical Area 4 (SA4) map: that includes:

• Cairns
• Central Queensland
• Darling Downs Maranoa
• Mackay – Isaac – Whitsunday
• Queensland – Outback
• Townsville
• Wide Bay.

Looking at the second dot point of the eligibility criteria, a regional employee is someone whose principal place of residence is in regional Queensland.

All eligibility criteria must be met to receive the 1% discount on the payroll tax rate.

To check if you qualify for the regional employer discount, you can go to the SA4 statistical map on our website. Once in the map, you’ll need to filter the SA4 statistical area map. Enter in the postcode for your business’s ABN as per the register. This can be found through the Australian Business Register’s ABN lookup site. Once in the map, when you click on the circle it will identify the region. If the name is identified as regional Queensland, you are able to claim the 1% discount.

If you select the regional employer rate discount in your return, the discounted payroll tax rate will be applied automatically.

The next stage of your return will be the non-taxable wages.

There are some wages that are exempt from payroll tax such as GST and paid parental leave scheme. As they are considered non-taxable, these wages should be declared in the ‘Queensland non-taxable wages’ section of the annual return. If they are included in the ‘Queensland taxable wages’ section within the 10 categories, payroll tax will be calculated on them.

In your annual return form, there are also 2 other separate fields for apprentices and trainees. Wages paid to apprentices and trainees may be exempt from payroll tax. To be regarded as an apprentice or trainee for payroll tax purposes, the employee must sign a training contract with their employer to undertake an apprenticeship or traineeship declared under the Further Education and Training Act 2014.

If apprentice and trainee wages are determined non-taxable, clients can claim a payroll tax rebate for the 2024–20 25 financial year. This will automatically be calculated after you enter the wages in the form.

We’ll now look at some other types of exempt wages.

Parental, adoption and surrogacy leave is exempt from payroll tax up to 14 weeks at full pay. However, this can be taken over a longer period—for example, 28 weeks at half pay. The Australian Government’s paid parental leave scheme payments are not taxable.

Wages paid to employees performing certain volunteer work are also exempt from payroll tax.

For example, wages paid to an honorary ambulance officers, such as St Johns, may be exempt from payroll tax. Wages paid to an employee performing as a volunteer of a rural fire brigade or the State Emergency Service are also exempt—you’ll need certification from a brigade leader.

To claim this exemption, the employee must be receiving normal pay while performing these volunteer activities. If they were on annual leave while volunteering with the State Emergency Service or working as an honorary ambulance officer the exemption would not be available.

Wages paid to an employee on military leave may be exempt from payroll tax. If you have an employee who is away from work either serving in or training for the Army Reserve, payments you make to them while they are performing this function are not taxable for payroll tax.

After declaring the Queensland taxable wages and non-taxable wages for you or your group, you will need to reconcile the mental health levy.

The levy was announced in the 2022–2023 State Budget by the Treasurer. The proceeds of the levy are dedicated to support state-run mental health services.

Your Australian taxable wages determine your threshold bracket; however, it is important to note that the levy will only be applied to your Queensland taxable wages that exceed the threshold. If you pay any wages that are exempt from payroll tax, those wages will not be subject to the mental health levy

For this financial year, employers or groups of employers with Australian taxable wages below $10 million will not be liable for the mental health levy.

For employers or groups of employers with Australian taxable wages above $10 million (which is the primary threshold), the primary levy rate is 0.25% applied to Queensland taxable wages above $10 million.

For employers or groups of employers with Australian taxable wages above $100 million (the additional threshold), the additional levy rate of 0.5% applied to Queensland taxable wages above $100 million. It is worth mentioning that the additional levy rate does not replace the primary levy rate. The primary rate of 0.25% is applied to wages above $10 million and is then added to the wages calculated at 0.5% above the $100 million.

This is how the mental health levy will display in QRO online for a DGE. It may look different for other employer statuses.

The start and end date will match the start and end date at the beginning of your form. For most entities, this will be the full financial year; however, if you have had a status change within a financial year the dates may be different. It is important you only declare wages for the period of these dates.

In the ‘Levy calculation’ section you will see your threshold amounts, wages and any applicable mental health levy calculated for the full period of the return.

A common question in the office gets asked is why the primary and additional thresholds may have amounts different to $10 million and $100 million. It is important to mention that if you are a member of a group, pay interstate wages or are only liable for part of a financial year, the threshold of $10 million and $100 million are adjusted.

After entering your Queensland taxable wages and interstate wages, your primary and additional thresholds will display calculating your mental health levy.

For a non-grouped member, the mental health levy calculation will be automatic; however, for a group the DGE must obtain the periodic levy amounts from each of its group members to reconcile the levy correctly. Group members can go to their ‘Year-to-date’ return tab in QRO Online and view their mental health levy assessed for the year. They must report this to their DGE as they themselves do not reconcile the levy in their annual return. The DGE for a group is liable to pay any shortfall or will be entitled to be credited for any overpayment on behalf of the group.

To know how much periodic mental health levy was payable for the financial year, you can go to your ‘Year-to-date’ tab in QRO Online and refer to the mental health levy assessed column.

As June wages (for monthly lodgers) and January to June wages (for half-yearly lodgers) are included in the annual return and not in a separate periodic return, as the mental health levy amounts applicable for these periods are also reconciled in an annual return of a non-grouped employer or designated grouped employer.

There are four different payroll tax rates in Queensland that can apply when you lodge your returns.

• For employers or groups of employers with combined Australian taxable wages of $6.5 million or less, the payroll tax rate is 4.75% on all Queensland taxable wages.
• For employers or groups of employers with combined Australian taxable wages above $6.5 million, the payroll tax rate is 4.95% on all Queensland taxable wages.
• From 1 July 2019 to 30 June 2030, regional employers may also be entitled to a 1% discount on the payroll tax rate. To determine if you are a regional employer, please refer to the description box in this video to view the regional employer timestamp.

The payroll tax deduction

For the current financial year, there is a $1 deduction for every $7 where the Australian taxable wages exceed $1.3 million. If the total Australian taxable wages exceed 10.4 million, there is no deduction entitlement.

If you have only employed for part of the year or had a change of status during the year, a pro-rata calculation of the threshold and deduction will apply.

For grouped members, the DGE claims any deduction entitlement on behalf of the whole group and is calculated on the members’ combined Australian taxable wages.

If the annual deduction is greater than the DGE’s taxable wages, the DGE can nominate other members of their group to receive the deduction in their annual return. This is called an excess deduction. This is a manual process completed by the office. Until the excess deduction is applied, it is recommended that grouped members lodge and pay their annual return to avoid any interest or penalties from applying. If a deduction is applied after payment is received, a refund will be issued.

Now that we have covered the main concepts of your lodgement, the form will display the total amount payable.

• ‘Queensland taxable wages’ is the total of the taxable wages entered in the QLD taxable wages section for the individual ABN. This will not be the groups taxable wages.
• ‘Less deduction’ is the annual deduction amount you are entitled to. This was covered in the previous slide. If you are a DGE and your individual Queensland taxable wages are less than the deduction, there will be no amount payable and you will be asked to give an excess deduction to your group members.
• ‘Taxable amount’ is the taxable amount of wages for the year. This is the deduction subtracted from your Queensland taxable wages.
• ‘Calculated tax’ is the payroll tax liability for the year before rebates are deducted. This is calculated by applying the payroll tax rate to the taxable amount.
• ‘Less rebates’ is the total amount of rebates entitled for the year.
• ‘Payroll tax amount’ is the payroll tax liability for the year after rebates are deducted.
• ‘Less total periodic amounts’ is the combined payroll tax liability of your periodic returns. It does not include interest or penalty tax. The breakdown of this amount for all your periodic returns can be found in the ‘Year-to-date’ returns tab in QRO Online.
• ‘Payroll tax liability/credit’ is the final payroll tax liability owing. This is the payroll tax amount less the total periodic amounts.
• ‘Mental health levy liability/credit’ is the final liability or credit for the year after the periodic mental health levy amounts have been reconciled.
• ‘Unpaid tax interest or UTI’ will display if full payment was not received by the due date.
• ‘Payments/credits received’ is the amount of payments/credits on the account.
• ‘Total amount payable’ is the combination of the payroll tax liability or credit plus the mental health levy liability or credit, after any payment or credit has been applied.

After your liabilities have been calculated, if your annual return results in a credit balance you will be asked if you want a refund paid into your bank account.

If you indicate Yes, you will be asked to provide or confirm bank account details. These details are drawn from the ‘Manage details’ section of QRO Online.

Annual return refunds are also a manual process. If your annual return results in a credit, it will be reviewed by the office before a refund can be processed.

If you are unable to submit your return, you should check if there are any errors. Errors will appear as an exclamation mark in the top-right corner. You can click onto this field to elaborate on what field may be missing. If you are unable to resolve the error, please call the office on 1300 300 734 for us to assist with troubleshooting.

Now, we will be going into the last section of this video, which is post-lodgement of the annual return. Once again, to skip to the part that is relevant for you, please refer to the timestamps in the description box below.

When you have submitted your return, a pop-up window will confirm you have submitted your return. This will also display the transaction number, or form number, which will be your reference number for payments.

After you have submitted the return, it will disappear from the ‘Returns’ tab and move to the ‘Payments’ tab in QRO Online.

There are a couple of ways you can make payment for the annual return lodgement.

If you have bank account details recorded in your QRO Online account, you can make direct debit payments by selecting the Pay button next to the liability. For detailed information on the other payment options, such as BPAY, EFT and cheque, you can select the View details button in the far right-hand column.

If you use an incorrect transaction number as a reference when making a payment outside of QRO Online it is important that you contact us to ensure the payment is allocated correctly in your account. If this occurs send a request to the email address on the screen.

If you would like to view your annual return after it has been lodged, you can do an historical search via the ‘Returns’ tab in QRO Online. Next to the search bar, select the icon that looks like a funnel with an addition sign. This will populate additional search criteria. You can select Financial year, select the relevant financial year and click Search. This will display your return.

When your return displays, you can either view your form or you can request a reassessment if an error has been made. The request for reassessment function is turned off from mid-May to a date after the annual return is due in July. No button will display during this period.

If you want to use this function to reassess an annual return after the due date, you will be asked to provide a reassessment reason and add a comment to support the reassessment. It is recommended that you put full facts and circumstances for the reason for reassessment. If there is any interest and penalty tax, we would also recommend you provide reasoning in the comments box if you are requesting remission.

Under tax administration laws, interest and penalty tax may apply when tax (including royalty) is not paid on time or has been under-assessed.

If tax is not paid on time, unpaid tax interest, also known as UTI, will accrue on a daily basis until the tax, related penalty tax and fees, and accumulated interest are paid in full. Interest may also apply if a document is not lodged on time.

UTI has 2 components:

• assessed interest, which is calculated at the time an assessment is generally lodged and will reflect in your annual return form
• late payment interest, also known as LPI, is calculated after an assessment is made and applied each Sunday. This will reflect in the payments section of your annual return.

To avoid paying UTI, pay your liability on time. The rate for each financial year is published on our website.

If a lodgement is not received by the due date, the office may raise a default assessment as an alternative to prosecution. When the assessment is made by the office, penalty tax is applied, which is 75% of the payroll tax liability.

Under the legislation, when payment is received by the employer it is automatically applied to any penalty tax and interest before being applied to any primary tax and levy liability. Interest will continue to accrue until the primary liability has been paid in full.

If you have any interest and penalty tax applied to your return, you can send a request into the office via email requesting remission. Please note, that remission of interest and penalty tax must be in accordance with the public rulings, which are displayed on the screen.

As we near the end of this video, the main points to summarise are:

• Confirm that there is an individual linked to the payroll tax entity in QRO Online. If you are successfully set up, you will see the ‘View accounts’ tab from your QRO online dashboard.
• If you are a group member, ensure you have provided all the relevant information. If you are a group member, you must provide your DGE with your current financial year Queensland taxable, non-taxable and interstate wages, along with your estimated wages for the following year.
• Confirm that your employer status is correct prior to lodgement. If it is incorrect, please make sure to lodge a final return prior to lodging your annual return as this will need to be manually reviewed by the office.
• And finally, the most important due date is 21 July each year. Late lodgement and/or payment will result in penalties and interest.

If you need more information, you can go to our website. There are links in the description for the topics covered today. Otherwise, if you would like to attend an in-person session, please have a look at our Queensland Revenue Office Eventbrite for sessions that may be running in your area.

And lastly, you can get in touch with our office by phone or email to speak to an officer about lodging your annual return. Our contact details are listed on the screen.

Please keep in mind that close to the due date, there may be some delays.

That now brings us to the end of our video for today. Thank you for taking the time to learn about the annual return payroll tax lodgement process here in Queensland. We hope that you have found this presentation useful.