Compare payroll tax, land tax, stamp duty, WorkCover premiums and other employer costs across all Australian states & territories in 2025. Find the cheapest state to employ staff for skilled migration and business relocation.

Introduction

Australia attracts thousands of skilled migrants every year because of strong demand for in-demand jobs and high salaries. Yet many employers and migrants overlook a critical factor: state taxes and fees vary dramatically. Payroll tax alone can differ by over $50,000 per year for the same $2 million wage bill depending on the state you choose. This complete 2025 comparison of state taxes & fees helps business owners, HR managers, and skilled migrants decide which state offers the lowest employer costs when sponsoring staff under the 190 or 491 visa programs.

Why State Taxes & Fees Matter for Skilled Migration and Business

State taxes directly affect the true cost of employing staff in Australia. For a company paying $100,000 to a skilled worker, the extra employer cost can range from under $5,000 in one state to almost $15,000 in another. These differences influence:
– Which state nominates you fastest for a 190 or 491 visa
– Salary packaging attractiveness for overseas talent
– Relocation decisions when moving employees interstate
– Overall competitiveness when bidding for Australia occupation shortages

Understanding the full picture of payroll tax thresholds, WorkCover premiums, land tax, training levies and occupational licensing fees lets you pick the smartest location.

Payroll Tax: Rates and Thresholds Across Australia (2025)

Payroll tax remains the largest state-based employer levy. Here are the current rates and thresholds:

– Northern Territory: 5.5% – $1.5 million threshold → Cheapest in Australia
– Queensland: 4.75% (4.95% over $6.5m) – $1.3 million threshold (rising to $1.6m regional)
– Western Australia: 5.5% – $1 million threshold (higher for some regional)
– Tasmania: 4% rising to 6.1% – $1.3 million threshold (2025–26)
– New South Wales: 4.85% – $1.2 million threshold
– South Australia: 4.95% (reduced rates to 0% for small business/apprentices) – $1.5 million threshold
– Victoria: 4.85% (1.2125% regional) – $700,000 threshold → Most expensive for metro employers
– ACT: 6.85% – $2 million threshold (highest rate in the country)

For a $3 million national payroll, Victoria costs almost $110,000 more per year than Queensland.

Workers Compensation (WorkCover) Premiums by State

WorkCover premiums vary even more than payroll tax because each state sets its own scheme:

– Tasmania: ~1.4–1.8% of wages (lowest average)
– Western Australia: ~1.7% average
– Queensland: ~1.5–2% depending on industry
– South Australia: ~1.8–2.2%
– New South Wales: ~2–2.5% average
– Victoria: ~2.5–3%+ (highest for many occupations)

A software company with $5 million wages can save $50,000–$80,000 annually by basing staff in Tasmania instead of Victoria.

Land Tax, Stamp Duty and Other Hidden Employer Costs

– Land tax thresholds range from $25,000 (Victoria) to $600,000+ (NSW, QLD no land tax on values under ~$600k–$1m)
– Stamp duty on employment contracts – abolished everywhere except Victoria and NSW in some cases
– Training levies – South Australia still charges 0.3% Construction Industry Training Fund levy on projects over $40,000
– Occupational licensing fees – electricians, plumbers and builders pay vastly different annual fees (e.g., Queensland ~$370 vs Victoria ~$700+)

Which State is the Cheapest to Employ Staff in 2025?

For most national or metro-based employers sponsoring skilled migrants:
1. Queensland – high payroll threshold + competitive WorkCover
2. Tasmania – lowest WorkCover + generous payroll concessions
3. Northern Territory – very low payroll burden (but limited 491 regional options)
4. Western Australia – balanced rates, strong mining/engineering demand

Victoria and the ACT remain the most expensive states for employers once payroll tax and WorkCover are combined.

Conclusion

State taxes and fees can add (or save) tens of thousands of dollars each year when hiring under Australia’s skilled migration program. Combine occupation demand from the latest visa occupation list with the real employer cost of each state, and you unlock smarter decisions for 190 state nomination, 491 regional sponsorship, or interstate relocation. Run the numbers before you commit — the cheapest state to employ staff might not be where you expected.