QLD Mental health levy update for 2023

Overview

From 1st January 2023, Queensland has added a Mental health levy to its payroll tax to facilitate a sustainable funding source for the enhancements to mental health services.

$6.5m indicates $6.5 million

$0 - $6.5m

>$6.5m - $10m

>$10m - $100m

>$100m

State Payroll Tax Rate

4.75%

4.95%

4.95%

4.95%

Medicare Levy Rate

0%

0%

0.25%

0.75%

Total Rate

4.75%

4.95%

5.20%

5.70%

** Victoria has also introduced a mental health surcharge effective 1st July 2022.


Transitional period

For the 2022–23 financial year, the thresholds are adjusted to accommodate the levy commencing during the financial year 1 January to 30 June 2023.

$0 - $5m

>$5m - $6.5m

>$6.5m - $50m

>$50m

State Payroll Tax Rate

4.75%

4.75%

4.95%

4.95%

Medicare Levy Rate

0%

0.25%

0.25%

0.75%

Total Rate

4.75%

5.00%

5.20%

5.70%

REFERENCES
Queensland Government: Business - Payroll tax rates and thresholds
Queensland Mental Health Commission - Mental health budget 2022-23
The thresholds and percentages vary between states and are often adjusted each year. Please refer to your State’s Office of State Revenue website for notices of changes.


What does it mean for you?

Impacted products and versions

Currently, Reckon Accounts is only able to handle a flat rate structure for Payroll Tax calculation.

Moreover, since the mental health levy is a new addition to the Payroll Tax, the Reckon Accounts Business Range will not be able to accommodate this change at this time. The way that the Payroll Tax reports are generated will be redesigned to handle this new change.

Affected versions:

  • Reckon Accounts Plus 2022 R2
  • Reckon Accounts Premier 2022 R2
  • Reckon Accounts Enterprise 2022 R2
  • Reckon Accounts Hosted 2022 R2


Workaround

Unfortunately, you will have to export the report and manually edit it in order to calculate the Payroll Tax Rate and Mental Health Levy for large employers.

Export the State Payroll Tax report

DESKTOP USERS

  1. Go to Reports menu > Employees & Payroll > State Payroll Tax Detail/Summary
  2. Click on Export and select a new Excel workbook
  3. Then, click on Export button

HOSTED USERS

  1. Go to Reports menu > Employees & Payroll > State Payroll Tax Detail/Summary
  2. Click on Export and select a new Excel workbook
  3. Click on Export then enter a File name and Save it on the My Live (Q Drive)
  4. Click on the Floating Toolbar and select Download File
  5. Save the Excel file on your computer


Update the State Payroll Tax report

TRANSITIONAL PERIOD

  1. Open the exported excel file on your computer
  2. Update the Percentage (Rate) to the applicable Total Tax Rate
    1. Example: When the Taxable Amount is $5.2m
    2. The Tax Rate is 4.75% as it is less than $6.5m
    3. The Mental Health Levy is 0.25% (primary rate) as it is greater than $5m
    4. The Total Tax Rate is 5.00%
  1. The newly calculated Payroll Tax Liability would be the correct amount for the QLD state during the transitional period
  2. The Total Tax Rate would just be 4.75% if not in the transitional period


2023/24 FINANCIAL YEAR

  1. Open the exported excel file on your computer
  2. Update the Percentage (Rate) to the applicable Total Tax Rate
    1. Example: When the Taxable Amount is $120m
    2. The Tax Rate is 4.95% as it is greater than $6.5m
    3. The Mental Health Levy is 0.25% (primary rate) + 0.5% (additional rate) as it is greater than $100m
    4. The Total Tax Rate is 5.70%
  1. The newly calculated Payroll Tax Liability would be the correct amount for the QLD state


How did we do?

Handling Paid Family and Domestic Violence Leave (PFDVL) in Reckon Accounts

Related Articles

STP Phase 2 - Medicare Levy Surcharge in Reckon Accounts 2023
NSW State Payroll Tax Rate update for 2022
STP Phase 2 - Medicare Levy Reduction (No. of Dependants) in Reckon Accounts 2023
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