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Payroll Tax on Independent Schools Is Driving Up Costs for Victorian Families

Rachel Holthouse /
15 July 2026

19 min read

Independent schools, like many families, are continuing to experience significant cost of living pressures. In recent years, one additional cost has placed further pressure on school budgets: payroll tax.

Payroll tax is a tax on employee wages collected by the Victorian Government. While government schools do pay payroll tax, it’s actually just an internal accounting measure. The school pays the government, which then gives the money straight back – almost like an internal transfer. For Independent schools, it’s a real cost that could otherwise be spent on educating children.

Victoria is the only state in Australia that taxes Independent schools. Every dollar paid in payroll tax is a dollar that could otherwise be invested in teaching, providing student support, learning programs or improving school facilities.

Independent schools understand that many families are working hard to manage household budgets while choosing an education environment that best supports their child’s learning and wellbeing.

Schools are committed to keeping fees as affordable as possible for families, but rising costs – including payroll tax – is making this increasingly challenging.

Choosing the school that is right for your child should not come with an unfair tax penalty. If your school’s fees are increasing, payroll tax will be a contributing factor.

With the Victorian State Election approaching in November, we encourage families to learn more about where each political party stands on payroll tax and Independent schools.

Victoria’s fastest growing school sector should remain within reach for families. Abolishing payroll tax would allow school fees to support students and help keep Independent schools affordable.

Your voice matters. Contact your local MP and ask them how they will support affordable school choice for your family.

Removing payroll tax would allow more school resources to remain focused on students and help keep Independent education accessible for more families.

Have your say

Support abolishing payroll tax for Independent schools? Complete this form to send a message to your local MP:

If your MP isn’t listed, they’ve already committed to abolishing payroll tax and you may like to send your message to the Victorian Treasurer instead.

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I am writing as a parent of a child attending an Independent school in Victoria to ask you to reconsider the application of payroll tax to Victorian Independent schools.

Like many Victorian families, we are experiencing the impact of rising living costs and ongoing economic pressures. Choosing an Independent school has been a significant financial commitment for our family, requiring careful budgeting and prioritisation to invest in our child’s education and, indeed, Victoria’s future.

Independent schools are not-for-profit organisations, and every dollar received is reinvested into students and school communities — supporting teachers, student wellbeing, learning programs, and the maintenance and improvement of facilities.

At the same time, Independent schools are facing increasing financial pressures, including rising costs associated with staffing, resources and operations. The imposition of payroll tax adds further pressure to school budgets at a time when schools are working hard to keep fees manageable for families. Every dollar directed towards payroll tax is a dollar that is taken from classrooms, student support programs, educational opportunities or improving school facilities.

I respectfully ask that the support abolishing payroll tax from Independent schools to help protect education affordability and ensure Victorian families can continue to access the educational choice that best meets the needs of their children.

Independent schools play an important role in Victoria’s diverse education system, and maintaining access to affordable education choices matters to families like mine. We want future generations of Victorian families to have the same opportunities available to them.

Thank you for considering my views. I look forward to hearing your position on this important issue.

Yours sincerely,
A Concerned Parent

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Payroll Tax on Independent Schools Is Driving Up Costs for Victorian Families

Independent schools, like many families, are continuing to experience significant cost of living pressures. In recent years, one additional cost has placed further pressure on school budgets: payroll tax.

Have your say

Support abolishing payroll tax for Independent schools? Complete this form to send a message to your local MP:

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