TAS payroll tax calculator

Tasmania has two thresholds — $1,250,000 and $2,000,000 — and two rates, 4% and 6.1%. Nothing unusual so far.

What is unusual is how they combine. Tasmania is not a simple marginal scale, and assuming it is will overstate your tax, sometimes by a factor of ten.

The actual formula

The State Revenue Office calculates Tasmanian payroll tax like this:

tax = (subsequent threshold − initial threshold) × 4%
     + (Tasmanian wages − subsequent threshold) × 6.1%

Read that second line carefully. It is added even when it is negative. That single detail is what separates the Tasmanian method from ordinary marginal banding, and it is not something you would guess from a rates table.

Why it isn’t marginal banding

Under marginal banding you’d expect wages between the two thresholds to be taxed at 4% on the amount above the initial threshold, and nothing more. Tasmania instead charges the full lower band and then subtracts a negative upper-band amount. Here is SRO’s own published example for a designated group employer:

Apportioned initial threshold = $614,583
Apportioned subsequent threshold = $983,333
Tasmanian wages = $750,000

($983,333 − $614,583) × 4% = $14,750
($750,000 − $983,333) × 6.1% = −$14,233.30

Tax payable = $14,750 − $14,233.30 = $516.70

Marginal banding on the same numbers would give ($750,000 − $614,583) × 4% = $5,417. The published answer is $516.70. Both are defensible-looking; only one is what Tasmania actually charges.

Above the subsequent threshold

Once Tasmanian wages exceed the subsequent threshold the negative term disappears and the formula behaves the way you’d expect. A Tasmania-only business with $2,400,000 in wages for the full year pays ($2,000,000 − $1,250,000) × 4% = $30,000, plus ($2,400,000 − $2,000,000) × 6.1% = $24,400, for $54,400 — SRO’s own worked example, and one of four this calculator is tested against.

Interstate wages and part years

Both thresholds are prorated by days employed and then apportioned by your Tasmanian share of total Australian wages. A business with $2,400,000 in Tasmanian wages out of $3,000,000 Australia-wide sees its thresholds fall to $1,000,000 and $1,600,000, and pays $72,800 instead of $54,400 — again, SRO’s published figure. See how interstate apportionment works for the general principle.

Grouping

Grouped Tasmanian employers share thresholds across the group, with the designated group employer claiming and other members taxed at the upper rate on their Tasmanian wages. Our grouping explainer covers the tests; the arithmetic above is what then runs on the group’s figures.

What this page does not model

SRO publishes no worked example for Tasmanian wages below the initial threshold, where the formula above yields a negative number. A negative liability isn’t meaningful, so we floor the result at zero rather than inventing behaviour the SRO hasn’t documented.

Frequently asked questions

What is the Tasmanian payroll tax threshold?

There are two. The initial threshold is $1,250,000 — below that no payroll tax applies. The subsequent threshold is $2,000,000, and it marks where the higher rate starts to bite.

What are the Tasmanian payroll tax rates?

4% and 6.1%. These have been unchanged since July 2018. How they combine is less obvious than it looks — see the formula below.

Is Tasmania just a normal marginal tax scale?

No, and this is the single most misunderstood thing about Tasmanian payroll tax. The official calculation is (subsequent threshold − initial threshold) × 4% + (Tasmanian wages − subsequent threshold) × 6.1%. The second term is added even when it is negative, which is not how marginal banding behaves. For a business inside the lower band this produces materially less tax than marginal banding would.

What happens if my wages are between the two thresholds?

The second term of the formula goes negative and is subtracted from the first. In SRO Tasmania's own published example, a designated group employer with apportioned thresholds of $614,583 and $983,333 against $750,000 in Tasmanian wages pays $14,750 + (−$14,233.30) = $516.70. Simple marginal banding on the same figures would give $5,417 — nearly ten times more.

How do interstate wages affect the Tasmanian thresholds?

Both thresholds are apportioned by your Tasmanian share of total Australian wages, and both are prorated by days employed if you did not employ for the full year. SRO publishes worked examples covering both, and this calculator is verified against all of them.

Is this the official Tasmanian payroll tax calculator?

No. This is an independent tool and is not affiliated with the State Revenue Office Tasmania. Confirm your liability with the SRO or a registered tax agent before lodging.

Source: State Revenue Office Tasmania — payroll tax rates and thresholds, and the SRO Annual Adjustment Return Guideline for the worked examples. Last verified 2026-08-31.