Payroll Tax and 482 Worker Sponsorship Obligations
What is payroll tax and why it relates to the 482 visa
Payroll tax is a tax paid by the employer (not the worker) to the state or territory government, calculated on the total wages bill above an exemption threshold. It is a financial obligation entirely separate from PAYG withholding or superannuation — and it does not distinguish by nationality or visa type of the employee.
When a business sponsors a worker on a subclass 482 visa, the wages paid to the sponsored worker (the nominee) count towards the company’s total wages bill. If the total wages bill exceeds the state exemption threshold, the business must declare and pay payroll tax to the relevant state revenue office.
Exemption thresholds and tax rates by state
Each state and territory has its own exemption threshold and tax rate. The following is a general overview (the rates can change each year; a business should check directly with the state revenue office):
New South Wales (NSW): an exemption threshold of around AUD 1.2 million per year. The tax rate increases with the size of the wages bill. A business with NSW wages must register with Revenue NSW if it exceeds the threshold.
Victoria (VIC): a threshold similar to NSW, around AUD 700,000 to AUD 1 million for a business operating only in VIC. The general tax rate is 4.85%, higher for some health and charity sectors that do not qualify for an exemption.
Queensland (QLD): an exemption threshold of around AUD 1.3 million. The general tax rate is 4.75%, rising to 4.95% for larger wages bills.
South Australia (SA) and Western Australia (WA): thresholds and rates a little lower than NSW and VIC, but the principles apply similarly.
Businesses operating across multiple states: if a business has employees in multiple states, it must declare payroll tax to each relevant state. The exemption threshold is apportioned according to the proportion of the wages bill in each state.
The 482 nominee and how payroll tax is calculated
A worker sponsored on a subclass 482 visa is an employee of the sponsoring business (or an associated business in the case of permitted on-hire). The wages they receive, including:
- Base salary
- Allowances counted towards PAYG
- The value of non-cash benefits counted towards the taxable value (some items)
…all count towards the business’s total wages bill for the purposes of calculating payroll tax.
This means that a small business previously below the exemption threshold can exceed it when hiring an additional 482 nominee on a salary that meets the sponsorship requirement (currently TSMIT is above AUD 70,000 per year). The business should calculate this before lodging a sponsorship application.
Practical obligations of the sponsor
Here are the practical steps a sponsor needs to take in relation to payroll tax when it has a 482 nominee:
Check the threshold: before starting a nomination, calculate the expected total wages bill including the nominee’s salary. If it is near or over the state threshold, payroll tax registration is required.
Register with the state revenue office: the business must register with Revenue NSW, the State Revenue Office VIC, the Queensland Revenue Office, or the equivalent agency in the state where the employee works.
Lodge periodically: payroll tax is usually lodged monthly and reconciled at the end of the financial year (30 June). Failing to lodge on time can lead to late penalties and interest.
Keep records: the business must keep payroll tax records for at least 5 years. This is also an important requirement when DHA checks sponsor compliance.
A note when DHA checks compliance
DHA does not directly administer payroll tax, but during a sponsor audit, the agency may request evidence of the business’s overall tax compliance status. A payroll tax breach can indirectly affect the assessment of the sponsor as a “fit and proper person”.
In addition, if a business pays less than the declared salary (to avoid payroll tax), this will conflict with the salary committed to in the 482 nomination — a serious breach that can lead to cancellation of sponsor status.
Payroll tax is an obligation that runs parallel to the 482 visa, outside DHA’s administration but directly affecting the real cost of sponsoring a worker. A sponsor should consult an accountant or state tax specialist before finalising a recruitment plan.