Victorian Budget Payroll Tax Changes

The Victorian Government’s 2026–27 State Budget has been welcomed by AACS, with the announcement that the payroll tax exemption threshold for non-government schools will increase from $15,000 to $16,397 in income per student from 1 July 2026. The exemption threshold will also be indexed to the Commonwealth Schooling Resource Standard (SRS) for secondary students.

When the Victorian payroll tax settings were introduced in 2023, AACS joined Christian school leaders, parent communities and sector representatives including Independent Schools Victoria (ISV) in strongly advocating against the policy, warning it would increase pressure on school fees and place additional burdens on families already making sacrifices to choose Christian education.

The Victorian Government’s decision to index the policy means that the majority of Christian schools will continue to receive payroll tax exemption protections under the updated threshold arrangement. According to Budget reporting, more than 90 per cent of non-government schools are expected to remain exempt under the new settings.

AACS will continue engaging with governments across Australia to ensure Christian schools remain accessible, affordable and sustainable for the families they serve.