• New Wave Accountants

3 Tips to Help Small Businesses Get Started with Payroll Tax

A payroll tax is a type of tax paid by employers to the government taken from their employees' salaries if their pay passes a certain threshold. For example, if an employer makes over $25,000 worth of taxable wages in a week, the business will need to start collecting and paying payroll taxes. This also applies to businesses that are a part of a group that is treated as one unit that also makes more than $25,000 a week in Australian taxable wages.

That being said, if a business makes well past $25,000 a week but does not register for payroll taxes, serious legal issues can occur that will disrupt the industry and hurt their ability to earn more money. As such, if you are a business making more than $25,000 a week in Australian taxable wages, here's what you need to know to register for payroll taxes:

1. Create an OSR Online Account

If you know that you are making well over $25,000 a week in Australian taxable wages, the first thing to do to register for payroll tax is to set up an OSR Online account. After that, make sure the individual account is linked to the taxpayer.

While doing that, make sure to have collected all the relevant information. This includes your ABN, client number, and name of your group members, the past year's wages in detail, the Queensland taxable wages figures to the recent month, your employer status, and more. Also, make sure to follow the step-by-step instructions to register for payroll taxes.

2. Determine Your Employer Status

Delving a little deeper into employer status, there are generally three types of employer statuses: group member, non-grouped member, and designated group employer. You will want to identify the right status for your business because the type of employer status you are will affect the rules and requirements you need to comply with. Picking the wrong employer status will mean you are dealing with the wrong rules and requirements, and you may end up in more trouble than you started with.

3. Identify Any Payroll Tax Deductions

In your effort to cover payroll taxes, do not forget that payroll taxes are taxes you can still deduct from. However, there is a catch: the more you make, the fewer deductions you can enjoy.

For example, Australian taxable wages that do not exceed $6.5 million but are higher than $1.3 million annually will experience this matter. $1 will be deducted from your annual deductibles for every $4 over the $1.3 million mark. You cannot claim a deduction at $6.5 million because, by that mark, your total possible deductions reach zero.

When claiming for a deduction, do note that only the designated employer can claim the deduction if you are part of a group. Also, the previous rule applies where a deduction can only be claimed if the total taxable Australian wages are no higher than $6.5 million.


Payroll taxes can be pretty confusing, especially for businesses that just started with payroll taxes. With so many numbers and other information to keep track of, the likelihood of ending up paying more than needed (or not paying enough) increases significantly. If you want to ensure that you are properly covering payroll taxes without overspending or underspending, we recommend reaching out to accounting professionals. They can help you keep track of your financial situation, and give you a second opinion regarding your payroll taxes that you need to save as much money as possible.

New Wave accounting is a provider of end-to-end accounting and bookkeeping services to help small businesses manage and maximize their finances. If you are looking for accountants at Gold Coast to help you stay on top of your payroll taxes, work with us today!

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