The regional payroll tax discount: does your business qualify in Queensland or Victoria?

Most owners first hear about the regional payroll tax discount from their accountant, usually around the time wages creep past the threshold. Then come the follow-up questions. Does my town count? Do the staff I’ve just hired in the city knock us out? Would moving the office actually save anything?

Only two states offer it, and they test eligibility in completely different ways. Getting it right can be worth tens of thousands of dollars a year. Getting it wrong can mean paying back that saving with interest.

Which states offer a regional payroll tax discount?

Queensland and Victoria. Everywhere else, payroll tax is charged at the same rate whether you’re in the CBD or out past the black stump. Here’s how the two compare for 2026–27:

	Queensland	Victoria
Standard rate	4.75% (4.95% above $6.5m in Australian wages)	4.85%
Regional rate	3.75% (3.95% above $6.5m)	1.2125%
Annual threshold	$1.3m, shrinking by $1 for every $7 of wages above that and gone at $10.4m	$1m, phasing out between $3m and $5m
Where the business must be	ABN address in one of seven listed regions	Doesn’t matter
Who counts as a regional employee	Someone whose principal place of residence is in regional Queensland	Someone who does more than half their Victorian work in regional Victoria
The wages test	At least 85% of Queensland taxable wages to regional employees	At least 85% of Victorian taxable wages to regional employees
End date	30 June 2030	No end date announced

The thresholds and standard rates for every state are in our payroll tax comparison.

Queensland: your address and where your staff live

The Queensland Revenue Office sets two tests, and you have to pass both.

1. Your principal place of employment is in regional Queensland. For most businesses, that means the business address registered against your ABN on the Australian Business Register. Regional Queensland is defined as seven ABS Statistical Area 4 regions:

• Cairns
• Central Queensland (Rockhampton, Gladstone, Emerald, Biloela)
• Darling Downs – Maranoa (Dalby, Warwick, Roma, Goondiwindi, Stanthorpe)
• Mackay – Isaac – Whitsunday
• Queensland – Outback (Mount Isa, Longreach, Charleville)
• Townsville
• Wide Bay (Bundaberg, Hervey Bay, Maryborough, Gympie)

2. At least 85% of your Queensland taxable wages go to regional employees. Here Queensland looks at where people live, not where they work. The QRO weighs things such as where an employee’s family and belongings are, the address on their driver’s licence and electoral roll, and whose name is on the utility bills.

The Toowoomba trap

Toowoomba is Queensland’s biggest inland city, but it’s not on the list. It’s its own ABS region, and it has long been treated as part of South East Queensland. Darling Downs – Maranoa, the region that wraps around it, is listed. So a transport yard in Dalby may qualify while the same business with its ABN address in Toowoomba’s industrial suburbs doesn’t. Because the boundaries follow ABS regions rather than council lines, the QRO links to the ABS map. Check your exact address there before you build the discount into a budget. Our Toowoomba and Darling Downs page covers the local lending picture.

The seasonal-worker catch

The QRO says working holiday makers and PALM scheme workers generally won’t count as regional employees, because temporary accommodation isn’t a principal place of residence. For a Bundaberg grower or a Bowen packing shed that leans heavily on those workers during harvest, this can push the regional share below 85%. And it happens in exactly the months the wage bill peaks.

Victoria: where the work actually happens

Victoria’s test is simpler in one way and stricter in another. According to the SRO’s ruling PTA-042v2, your registered office or principal place of business is irrelevant. All that matters is whether at least 85% of your Victorian taxable wages go to employees who do more than half their Victorian work in regional Victoria.

A few practical consequences:

• A Melbourne head office doesn’t stop you qualifying if the people you employ actually work in Ballarat, Bendigo, Shepparton or Warrnambool.
• Moving your registered office to Geelong doesn’t make you eligible if your staff still work in Dandenong.
• Remote workers count where their home is. A bookkeeper working from home in Castlemaine is a regional employee. One working from home in Brunswick isn’t.
• Time spent working interstate is ignored. The test only looks at the Victorian portion of each person’s work.

Regional Victoria is a fixed list of councils, including Greater Geelong, Ballarat and Greater Bendigo, plus the alpine resorts. Some outer-fringe areas that feel like the country aren’t on it, so check the SRO’s list rather than going by instinct. The Geelong page has more on doing business down the highway.

Thinking about a hire, a move or a second site and want to know how the finance side would stack up? Check your options here. It takes about a minute.

What the discount is worth: two illustrative examples

Illustrative example (Mackay, QLD): an engineering workshop with its ABN address in Paget pays $3m a year in Australian wages, all in Queensland, to staff who live around Mackay. Its deduction is $1.3m less $1 for every $7 above $1.3m, which leaves about $1,057,143. That makes roughly $1,942,857 of wages taxable.

• At the standard 4.75%, the bill is about $92,286.
• At the discounted 3.75%, it’s about $72,857.
• The saving is roughly $19,400 a year. If the same business had its ABN address in Toowoomba, the saving would be zero.

Illustrative example (Ballarat, VIC): a manufacturer pays $2.5m in wages, all to people working at its Wendouree plant. With the full $1m deduction, $1.5m is taxable.

• At 4.85%, payroll tax is $72,750.
• At 1.2125%, it’s about $18,188.
• The saving is about $54,560 a year, which pays for a lot of apprentices.

Now suppose the Ballarat business opens a Melbourne showroom and pays the staff there $450,000 of its $2.5m. That’s 18% of wages, so only 82% now goes to regional employees, and the test is failed. In Victoria the whole payroll then pays the standard rate, not just the Melbourne wages. One showroom quietly costs about $54,000 a year in lost concession.

Common mistakes that cost the discount

1. Assuming the town counts. Toowoomba in Queensland, and fringe areas in Victoria, catch people out. Check the official map or list.
2. Forgetting the ABN address (Queensland). If the ABR still shows an old Brisbane address from before you moved, update it.
3. Hiring in the city without running the numbers. A sales rep in Brisbane or an office in Melbourne can tip you under 85%.
4. Counting the wrong people. Contractors caught by the contractor provisions, seasonal staff and fly-in workers can change the percentage either way.
5. Not keeping evidence. The Victorian ruling lists work-location records, employment contracts, working-from-home agreements and vehicle logbooks as the kind of proof to keep. In Queensland, keep residence records for each employee.
6. Treating a group as one employer. In both states, each group member is assessed separately. One member can be regional while another pays the standard rate, so map the whole group. Our grouping guide explains how groups form.

Use the payroll tax checker to see where your wages sit against the threshold, and the registration checklist if you’re about to cross it for the first time.

Is it worth moving to qualify?

Sometimes, but payroll tax alone rarely justifies a move. Weigh the saving against everything else:

• Staff. In Queensland your people have to live in the region. Moving the office to Gympie doesn’t help if the team keeps commuting from the Sunshine Coast.
• The time limit. Queensland’s discount is legislated to 30 June 2030, so a move today buys less than four years of certain saving.
• Costs that land first. Fit-out, relocation, duty on premises if you buy, and a dip in trade while you settle in. Our interstate move checklist covers the cross-border version.
• Lending. Regional property is assessed a little differently as loan security, so check how lenders would view a new building before you commit.

For a business that’s already regional, though, the decision is usually about protecting the discount. Check where your next hires will live or work before you sign them.

Growing in the regions? Let’s look at the finance side

Running a regional business usually means hiring locally, investing in your own premises and carrying wages through the slow months. The payroll tax discount helps, but expansions still need cash up front. We help owners in country Queensland and regional Victoria fund that kind of growth all the time, from a second workshop bay to a new building, with property-secured loans from $20k to $5m and unsecured options sized on your turnover.

The enquiry takes about 60 seconds, and there’s no credit check just for asking, so your credit file stays exactly as it is. We don’t pass your details around a pile of lenders, so you won’t get calls from strangers. A real person who knows how regional lending works reads what you’ve sent and calls you. Please fill the form in accurately, including where the business is based and what property you have. That way the first option we put to you is the right one.

Find out where you stand →