Why are private schools charged payroll tax?

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From July 1, 2024, Victorian non-profit private schools with an income per student of more than $15,000 were liable to a 4.86% payroll tax.

These schools would pay the Victorian government an estimated $101.8 million in 2025.

An investigation by The Age revealed that the payroll tax charge resulted in an average annual tuition increase of 6.5% across these schools, significantly more than the 2.8% inflation rate.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.