Payroll Tax for Mobile Crews Across State Lines

Payroll tax for mobile crews follows state nexus rules, not simply the job location. You must test where each employee works, where they live and where the employer is based, then apply that state’s threshold and rate.

Start with the state nexus test

Construction crews move around. A worker might spend Monday in Tweed Heads, Tuesday in Coolangatta and the next week on a project near Brisbane. That does not mean you split every hour between New South Wales and Queensland.

Payroll tax is generally allocated by employee and by month. The first question is whether the employee performed all services in one state during that month.

If they did, the wages usually belong to that state. If they worked in more than one state, you move through the nexus hierarchy.

This is separate from PAYG withholding, super and workers compensation. It is also separate from the award or enterprise agreement covering the employee.

Current thresholds and headline rates

The table below shows selected state settings as at September 2026. These are annual thresholds and standard headline rates. Regional concessions, levy rules, threshold tapering and grouped employer calculations can change the final amount.

State or territory	Annual threshold as at September 2026	Standard rate as at September 2026
New South Wales	$1,200,000	5.45%
Victoria	$1,000,000	4.85%
Queensland	$1,300,000	4.75% up to $6.5 million in Australian taxable wages, then 4.95%
Australian Capital Territory	$2,000,000	6.85%

As at September 2026, Victoria also has separate regional employer and mental health levy settings. Queensland has regional employer rules. Do not apply a concession just because the project is regional. The employer and employee conditions must be met.

Thresholds are not a free allowance for every entity. Related companies and businesses can be grouped. A group generally shares one threshold, even when several entities employ workers on different projects.

Work through the hierarchy in order

For each employee and month, use this sequence:

1. Services wholly in one state: Allocate the wages to that state.
2. Services in more than one state: Look at the employee’s principal place of residence.
3. No Australian principal residence: Look at the employer’s registered business address on the Australian Business Register.
4. No relevant registered address: Look at the employer’s principal place of business in Australia.
5. No result from those tests: Consider the state where the employee mainly performed services.

The exact wording sits in each jurisdiction’s payroll tax law. Most states and territories use broadly harmonised nexus provisions, but administration and exemptions can differ.

A worksite address, branch office or depot does not automatically become the employee’s principal place of residence. Keep evidence of where the employee actually lives. Their address in the payroll file is useful, but it needs to be current.

A mobile crew example

Say eight employees live in New South Wales. During September, they work 12 days on a NSW road project and eight days on a Queensland project.

Because they performed services in more than one state during the month, you do not normally split their ordinary wages 60:40. Their principal place of residence points the wages to New South Wales.

Now take one employee who works the whole month on the Queensland project. If every service for that month is performed in Queensland, their wages usually have a Queensland nexus, even though their home is in New South Wales.

Next month might produce a different result. That is why a standing allocation based only on the employee’s home depot can go wrong.

What counts as wages

Do not stop at base pay. Depending on the state rules, taxable wages can include:

• overtime and shift payments
• allowances
• bonuses and commissions
• employer superannuation contributions
• the taxable value of certain fringe benefits
• termination payments
• payments to directors
• some contractor payments
• payments made under employment agency arrangements

Travel and accommodation amounts need particular care. An allowance is not automatically exempt because it reimburses work travel. Each revenue office sets conditions and may recognise only part of an allowance.

Construction contractor payments are another common trap. Payroll tax contractor provisions can deem payments to be wages unless an exemption applies. Labour-only arrangements, long engagements and contractors working mainly for one principal deserve a closer look.

Build the check into month-end payroll

Use a repeatable monthly process rather than fixing allocations at year-end:

1. Export employee work locations from time sheets or site records.
2. Identify anyone who worked in more than one state during the month.
3. Confirm each affected employee’s principal residential address.
4. Apply the nexus hierarchy and record the reason for the allocation.
5. Add taxable allowances, super, fringe benefits and relevant contractor payments.
6. Combine wages across grouped entities.
7. Review registration and lodgement obligations in every affected jurisdiction.
8. Reconcile payroll tax returns to the payroll ledger and general ledger.

Time sheets show where services occurred. They do not, by themselves, decide the taxing state when services occurred in several jurisdictions.

For the wider payroll process, see the payroll operations hub. You can also use the compliance audit checklist to review employee addresses, work locations, grouping and taxable wage categories.

Watch for threshold apportionment

An employer can have wages allocated to one state while also paying wages elsewhere in Australia. Interstate wages may not be taxed again in that state, but they can affect the threshold deduction available there.

This matters when a business expands into a new state. A small amount of local wages does not always mean there is no registration or payment obligation. The revenue office may use total Australian wages when calculating the available threshold.

Check each state’s registration deadline and return frequency. Monthly returns and annual reconciliations are separate obligations. Do not wait for the annual return to investigate a crew that crossed a border nine months earlier.

Keep evidence that another person can follow

Keep time sheets, rosters, project records, employee address changes, Australian Business Register details, payroll reports and the nexus decision for each affected month.

If an allocation is wrong, correct it promptly. That can mean amending returns in two jurisdictions, not just one. Interest and penalty tax may apply to an underpayment, while a credit in the other state may require a separate amendment or refund request.

The practical rule is simple: track where people worked, but do not allocate tax until you have applied the full nexus test.