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  • What to exclude from your business's assessable income

    Not all payments you receive are assessable income for income tax purposes and do not need to be included as assessable income.

    On this page

    List of non-assessable amounts

    The following amounts are not assessable: betting and gambling wins (unless you operate a betting or gambling business)

    Non-assessable non-exempt government grants for grant recipients

    The Federal Government can declare eligible business support grants as non-assessable, non-exempt (NANE) income. This means you do not include NANE income in your income tax return and you do not pay tax on it.

    COVID-19 recovery payments

    Some COVID-19 recovery payments from the Government to support small businesses will be NANE income for tax purposes.

    Eligibility

    To meet the eligibility requirements to treat support grants as NANE income on your income tax return, you will need to self-assess.

    A payment will be NANE if it was received:

    • under an eligible grant program
    • in the 2020–21 or 2021-22 financial years
    • by a small business with an aggregated turnover of less than $50 million in the income year the payment was received.

    Grants

    • Alpine Business Fund
    • Alpine Support Program
    • Business Costs Assistance Program Round Two
    • Business Support Fund 3
    • Impacted Public Events Support Program
    • Independent Cinema Support Program
    • Licensed Hospitality Venue Fund
    • Licensed Hospitality Venue Fund 2021
    • Live Performance Support Program
    • Melbourne City Recovery Fund - Small business reactivation grants
    • Outdoor Eating and Entertainment Package
    • Sole Trader Support Fund.
    • Sustainable Event Business Program

    Example: receiving a grant eligible for NANE income

    Fresh Brew is a small business operating a café in Victoria.

    Fresh Brew received an eligible grant payment under the Outdoor Eating and Entertainment Package for the 2020-21 financial year.

    This Package is part of the Victorian Government's response to the economic impacts of Coronavirus.

    The Minister has declared that the Outdoor Eating and Entertainment Package is a grant program that's eligible for NANE income.

    In the 2020-21 financial year, Fresh Brew self-assessed and identified that they are a small business as their turnover was less than $50 million in the income year the payment was received.

    As Fresh Brew received an eligible grant payment in the 2020-21 financial year and they are a small business, they do not need to include the grant in their business income.

    End of example

    Natural disasters

    Storms and floods

    2021 storms and floods

    • Recovery grants

    Small businesses and primary producers affected by the storms and floods that occurred between 19 February 2021 and 31 March 2021 may be eligible to receive special disaster recovery grants.

    The grant must be a Category D grant under the Disaster Recovery Funding Arrangements 2018.

    These grants are NANE income from the 2020-21 financial year and onwards.

    2019 North Queensland flood

    • Recovery grants

    Small businesses, primary producers and not-for-profit organisations affected by the North Queensland monsoonal trough flooding between 25 January 2019 and 28 February 2019 may be eligible to receive special disaster recovery grants.

    The grant must be a Category C or D grant under the Disaster Recovery Funding Arrangements 2018.

    These grants are NANE income from the 2018-19 financial year and onwards.

    • Restocking, replanting or farm infrastructure grants

    Primary producers may be eligible to receive certain grants for replacing or repairing farm infrastructure, restocking or replanting, or a similar purpose.

    These grants are non-assessable non-exempt income for the 2018–19 financial year and later financial years. Therefore, you do not pay tax on the grants.

    Grant categories

    To find out what type of category grant funding you received under the Disaster Recovery Funding Arrangements 2018, you may need to speak to the person within your state or territory who administered your grant.

    Small business criteria

    A small business receiving a 2019 or 2021 recovery grant, must meet the following small business criteria:

    • employ less than 20 full-time equivalent staff
    • are not a sole trader business where 50% or less of their income comes from that business.

    Bushfires

    • 2019-2020 Bushfires Relief Recovery Payments    
      • Any bushfire relief recovery or benefits provided by any level of government, including: 
       
    • Commonwealth
    • states
    • territory
    • a municipal corporation
    • a local governing body.

    Water infrastructure improvement payments

    Payments for Sustainable rural water use and infrastructure programs are NANE income if the participant (recipient) chooses to have the payment treated this way. The participant can also choose to treat it as ordinary income.

    For more information on the choice options and eligible programs visit Sustainable rural water use and infrastructure program.

    Last modified: 22 Jul 2021QC 44457