Staying compliant with Australian payroll tax legislation is rarely a “set and forget” task. Just as you adjust to one set of rules, the goalposts often move.
The Australian Capital Territory (ACT) has announced significant payroll tax reforms for the 2026-2027 financial year. For employers with operations in the ACT, these changes represent a major structural shift.
Effective in two stages (January and July 2026), these reforms introduce new surcharges, adjust thresholds, and alter base rates.
The Breakdown: What is Changing?
The ACT Revenue Office is moving away from a single flat-rate structure towards a more progressive, tiered system. The changes specifically target businesses with larger Australia-wide wage bills, meaning your total workforce costs across the country will determine your liability in the ACT.
The reforms will be rolled out in two distinct phases:
Phase 1: Effective 1 January 2026
The first phase builds on surcharges introduced in July 2025 by adding a flat rate for the largest employers.
- Wages more than $50m but not more than $100m: 6.85% general rate plus 0.5% surcharge.
- Wages more than $100m but not more than $150m: 6.85% general rate plus 1.0% surcharge.
- Wages exceeding $150m: flat rate of 8.75% (no surcharge).
Phase 2: Effective 1 July 2026
The second phase replaces surcharges with a fully progressive rate structure, plus threshold and base rate changes.
- Threshold Reduction: Drops from $2.0 million to $1.75 million.
- Wages $1.75m to $20m: 6.75%.
- Wages $20m to $50m: 6.85%.
- Wages $50m to $100m: 7.35%.
- Wages $100m to $150m: 7.85%.
- Wages exceeding $150m: 8.75%
The Compliance Challenge
Payroll teams and software providers must be vigilant. A change in rates and logic halfway through a financial year requires precise cut-off procedures to ensure liabilities are calculated correctly for the first half versus the second half of the year.
As the ACT Revenue Office advises, employers must understand the impact on their specific payroll configuration to avoid underpayment penalties. For large, multi-jurisdictional employers, the complexity of calculating “Australia-wide wages” to determine the correct ACT surcharge tier adds another layer of administrative burden.
Navigating Complexity with Astute Payroll
When legislation becomes complex, manual calculations and legacy systems become liabilities.
When legislation becomes complex, relying on manual calculations or legacy systems quickly becomes a liability. At Astute Payroll, we specialise in workforce management technology that evolves alongside Australian tax law. The 2026-2027 ACT reforms highlight exactly why businesses trust our ecosystem: our platform is designed to adapt to these shifts, ensuring that rate changes and threshold adjustments are applied automatically at the correct effective dates, without the need for manual intervention.
Need to ensure your payroll is future-proof? Contact Astute Payroll today to learn how our technology and managed services keep you compliant, no matter how complex the legislation becomes.
