What to include in your assessable income
Income that is subject to tax is called assessable income.
Generally, when calculating the assessable income of your business, you must include amounts you receive (or earn) in the ordinary course of running your business, such as from selling trading stock or providing services.
Normally, you must also include any of the following amounts:
- amounts from isolated transactions outside the ordinary course of your business, if you intend to make a profit
- amounts over their written-down value when selling certain depreciating assets (see Depreciating assets)
- commission income
- compensation, such as workers’ compensation, or payments for trading stock losses, business interruptions or contract cancellations
- dividends and franking credits (credits from company tax already paid) on business investments
- fuel tax credits, product stewardship (oil) benefit and cleaner fuels grant
- wine equalisation tax producer rebate
- excise brewery refund
- grants, such as an amount you receive under the Apprenticeship Incentives Program
- incentive payments, such as a cash payment to lease business premises
- income earned outside Australia and you are an Australian tax resident
- interest on business investments, and interest on overpayment or early payment of tax
- lease payments and hire charges
- net capital gains from selling certain capital assets, such as land or buildings (see Capital gains)
- payments for selling know-how
- personal services income (PSI) if the PSI rules apply to you (see Personal services income (PSI)
- prizes or awards for your business, such as a cash prize for being the best business in your region
- recovered bad debts for which you have received a tax deduction
- rental income from property owned by your business
- royalties, such as payments when other entities use your patent
- subsidies for running a business
- the value of goods you take from trading stock for your own private use (see Accounting for trading stock)
- the value of trading stock on hand at the end of the income year, if it's more than at the start of the year
- the market value of any transactions not involving money, such as barter transactions.
Generally you need to include your gross earnings or proceeds, not just your profit.
Most money you receive from running your business, such as from selling goods or services, is assessable. You may also make capital gains or earn commissions or fees.