Salary and wages
The most common type of employment income is salary and wages, whether you have one job or more, and whether you work full time, part time or casual. This income may be cash-in-hand, paid directly into your bank account or paid in another way.
Salary and wage payments you need to declare in your tax return include:
- your normal weekly, fortnightly or monthly pay
- JobKeeper and stand-down payments you receive because of COVID-19
- commissions
- bonuses, including retention bonuses to remain with your employer
- money for part-time or casual work
- parental leave pay
- dad-and-partner pay
- payments from
- an income protection insurance policy
- a sickness or accident insurance policy
- a workers compensation scheme
- pay and allowances for continuous full-time service in the Australian Naval, Army or Air Force Reserve (but you may not have to declare salary and allowances while deployed overseas)
- income you receive in connection with a joint space and defence project – unless exempt from Australian income tax
- foreign employment income – unless exempt from Australian income tax.
If you are an employee of an Australian Government agency (and not a member of a disciplined force), include income you earn from delivering Australian official development assistance.
Allowances and other work-related income
You may receive allowances or other payments in connection with your employment that you need to declare in your tax return. These payments may include:
- allowances, including travel and overtime meal allowances
- cash tips, gratuities and payments for your services
- consultation fees and payments for voluntary services
- jury attendance fees
- income for providing personal services outside of employment or in a non-business capacity (for example, income from working in the sharing economy).
Lump sum payments
A lump sum payment is a one-time payment that is taxed and reported differently to your salary and wage income. You include lump sum payments as assessable income in your tax return in the income year you receive the payment.
You may receive a lump sum payment:
- when you leave a job, such as
- an employment termination payment (ETP)
- a genuine redundancy payment
- an approved early retirement scheme payment that exceeds the tax-free limit
- for unused annual leave, long service leave or special leave you are entitled to when you leave a job
- in arrears (known as back pay or lump sum payments in arrears) for money your employer owes you from an earlier income year.
If you receive a lump sum payment in arrears, you don't need to amend prior year tax returns. There are tax offsets for lump sum payments in arrears, which prevent you paying too much tax in the year you receive the payment.
Reportable fringe benefits and super contributions
You need to declare:
- reportable fringe benefits you receive from your employer (such as, a work car for private purposes, a cheap loan or free private health insurance)
- reportable super contributions made on your behalf by your employer.
You don't have to pay tax on these amounts. We use these amounts to work out whether you are eligible to receive certain government benefits and tax offsets.
Income from working such as wages, allowances, lump sum payments, cash and tips, reportable fringe benefits and super.