Payroll Tax and Household Employers: Do You Need to Register?

Hiring a nanny comes with its fair share of admin. Tax file numbers, superannuation, PAYG withholding, payslips, it can feel like a lot to wrap your head around. So it's no surprise that "payroll tax" shows up on plenty of families' worry lists too.

Here's the good news for most households: as a payroll tax nanny employer, you almost certainly won't need to register at all. Let's break down why, and when the picture changes.

What actually is payroll tax?

First, a bit of mythbusting. Payroll tax isn't the same thing as the PAYG tax withheld from your nanny's pay each cycle. That's a separate, federal obligation you'll already be managing.

Payroll tax is a state and territory tax, charged to employers once their total taxable Australian wages cross a set threshold. Because it's administered state by state, the numbers vary depending on where your employees are based.

For the 2026-27 financial year, that threshold sits at $1.2 million in NSW, $1 million in Victoria and $1.3 million in Queensland. Other states follow a similar pattern, each with its own payroll tax threshold.

Read those numbers again. For a household with one nanny on the books, they're nowhere close.

So does hiring a nanny trigger registration?

For the vast majority of families, no.

Becoming a household employer doesn't automatically put payroll tax on your radar. Say you're paying a full-time nanny $80,000 a year. Even factoring in super and other on-costs, that figure sits well under every state and territory threshold currently in place, including $1 million in WA, $1.5 million in South Australia and $1.25 million in Tasmania.

If your nanny is your only employee, payroll tax honestly isn't something worth losing sleep over.

When could it become relevant?

This is where household employer obligations in Australia get a little more nuanced, and it's worth understanding the exceptions rather than assuming they'll never apply to you.

Payroll tax rules don't always look at one employee's wage in isolation. Depending on your state and your broader circumstances, things like interstate employees and grouping provisions can change how your threshold is calculated.

Revenue NSW, for example, confirms that employers paying wages both in NSW and interstate may have their available NSW threshold reduced, based on the proportion paid within the state. Businesses grouped together for payroll tax purposes can also have their combined wages assessed as one.

In practice, it's worth getting proper advice if any of the following sound like you:

• You personally employ a significant number of people
• You run a business (or businesses) with a sizeable payroll
• You employ staff across more than one state or territory
• You're already registered for payroll tax through a related business entity
• Your total taxable Australian wages are creeping toward your state's threshold

The takeaway here is simple: don't assume your nanny's salary always sits in its own little bubble, separate from everything else you employ or run.

It's also worth remembering that thresholds and rates get reviewed and adjusted over time, so what applies this financial year won't necessarily be the figure in a few years. If your household's circumstances are anything but straightforward, a quick check with your accountant now can save a much bigger headache later.

A word on directors and business owners

If you run a company or a trust as well as employing a nanny privately, it's easy to assume the two are kept entirely separate for payroll tax purposes. Sometimes they are. But grouping provisions exist precisely because state revenue offices want to prevent wages being split across related entities to dodge the threshold. If you're a business owner already registered for payroll tax elsewhere, it's worth asking your accountant whether your nanny's wages could ever be considered part of that group. For most families this will be a non-issue, but it's a five-minute question that's worth asking once rather than assuming.