Payroll tax for non-government schools

Including a list of non-government schools exempt from payroll tax and a list of non-government schools not exempt from payroll tax.

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From 1 July 2024, non-government schools with an income per student of more than $15,000 will be subject to payroll tax, following changes to legislation announced by the Minister for Education on Thursday 29 June 2023.

As part of cost-of-living measures introduced in the 2026-27 State Budget announcing Payroll tax relief for non-government schools, the $15,000 income per student threshold for the non-government schools payroll tax exemption will align with the 2023 Schooling Resource Standard (SRS) for secondary students.

From 1 July 2026, non-government schools with an income per student up to $16,397 will be exempt from payroll tax. The fee per student threshold will increase each year in line with the SRS amount determined and published by the Commonwealth Government. Eligibility for the payroll tax exemption for non-government schools will continue to be assessed against the latest available income per student data and the revised threshold.

All non-government schools will be assessed once a year against the revised threshold; if a school’s total income per student exceeds the threshold at that time, the school will become subject to payroll tax. If a school’s total income per student falls below the threshold at that time, the school will no longer be subject to payroll tax.

New non-government schools opening between now and 2029 will also be assessed against the revised threshold.

The department is liable for payroll tax for all government schools staff salary expenses and individual schools are charged a payroll tax expense annually.

How income per student is calculated

To determine income per student, the department uses the Commonwealth Department of Education’s Financial Questionnaire (FQ). The questionnaire requires schools to provide the following information:

  • Fees and Charges (excluding Overseas Students)- Tuition (System & Diocese funding included)
  • Income from Excursion State/Territory Government trips - Tuition (System & Diocese funding included)
  • Other Receipts from Students - Tuition (System & Diocese funding included)
  • Fee/levies Allocated for Capital Purposes - Tuition (System & Diocese funding included)

The assessment of income takes into account fees, charges, compulsory levies and other income, as well as fee reductions for scholarships and other financial relief to families in financial difficulty.

Income relating to overseas students has been excluded on the basis that these students do not receive funding from either the Commonwealth or through the state’s Financial Assistance Model (FAM).

Additionally, schools that operate kindergartens or day care centres are required to separate out fees from these services, therefore fee income from these centres is not assessed. The fee income in relation to school students only was used for assessment purposes.

The initial basis of the determination used FQ data submitted at each of the specified categories for the 2021 reporting period and the 2021 funded enrolments were used to derive the per capita. The data used annually represents the most up to date FQ.

The following sets out the calculation:

  • Sum of income recorded for each of the categories listed above for the most recent reporting divided by funded enrolments.

Example:

  • Total FQ categories used for determination = $5,500,000 / 500 enrolments (based on most recent funded enrolments) = $11,000 income per student.

Non-government schools exempt from payroll tax

Under the changes, some non-government schools will be exempt from payroll tax i.e., schools with an income per student of less than $16,397 representing the 2023 Schooling Resource Standard (SRS) for secondary students.

The departmental assessment is undertaken as per section 82 of the State Taxation Acts Amendment Act 2023 which came into operation on 1 July 2024, the Act amended clause 14(3) of Schedule 2 to the Payroll Tax Act 2007.

Exempt schools

Not exempt schools

Education & training

Updated

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