If you are a business in Australia, state governments will charge you a payroll tax if your payroll crosses a certain threshold. Payroll is basically the collection of total pay to employees in a given financial year.
Here is a link to Victoria’s Payroll tax.
The current Victorian tax is 4.85% over $1,000,000 and there are further surcharges if you do over 10 million or 100 million.
Businesses with a national payroll above $10 million will pay a combined 1%.
Businesses with a national payroll above $100 million will pay a combined 2%.
If you do 2 million in payroll a year, you owe $48,500. This is literally a growth tax. There is no incentive for growth. Hiring employees locally is burdensome.
This varies across states. In NSW from 1 July 2025, it is 5.45% over after every dollar over $1,200,000 in payroll.
In the tech industry, this could mean 7 employees before you are taxed.
Has there ever been a more counterintuitive tax in any jurisdiction ? Let me know in the comments.