Account based income stream

An account based income stream is an income stream paid from a super account held in the member's name.

Accumulation fund

A super fund you, or your employer, contribute regular payments to. When you retire you receive the total contributions, plus interest and earnings (less management fees, taxes and other deductions).

Accumulation phase

The period during which a superannuation interest is not in the retirement phase.

Accumulation phase value

This is the value of the accumulation interest that would become payable if the individual voluntarily caused the interest to cease at 30 June of the relevant financial year.

Acquisition

Acquisition is a very broad term. It includes the things you buy (goods and services) for your business or enterprise. It also includes many other transactions, such as when you obtain advice or information, take out a lease of business premises or hire business equipment.

Active account

A member account that has received one or more contributions or rollovers in the last 5 years.

Adjusted taxable income (ATI)

Taxable income plus certain other income and losses declared by you. Your ATI and the ATI of your spouse (if you have one) are used to work out your eligibility for and amount of both of the following:

• tax offsets for dependants
• other government benefits.

(Before the 2009–10 income year, separate net income – SNI – was used as the income test for tax offsets relating to dependants.)

For more information about income tests, refer to Income tests.

Advice and guidance

Refers to a range of products the ATO offers, including public and private advice or guidance, to help you understand your obligations and to be aware of your rights and entitlements.

After-tax super contributions

Super contributions made with after-tax money, such as your take-home pay. These are either:

• personal – as most after-tax contributions are made by the member (you)
• spouse contributions – contributions to your spouse's super fund.

These contributions are also called 'non-concessional' as they usually count towards your non-concessional contributions cap.

Aggregated turnover

Your annual turnover, plus the annual turnovers of any business entities that are your affiliates or connected with you.

Allocated pension/Allocated annuity

The key features of these benefits include:

• there is no specified term
• payment must be made at least annually
• maximum and minimum payment restrictions apply
• the payment amount each year depends on the account balance and your age on 1 July each year
• there is no protection against the money running out during your lifetime
• the pension can be commuted at any time
• on death, the balance may be paid as a lump sum to a designated beneficiary, used to buy a further pension for a surviving spouse or may continue as a reversionary pension.

Allowances

Amounts paid by employers to cover anticipated costs or as compensation for conditions of employment.

Annual turnover

All ordinary income you earned in the normal course of running a business for the income year. it’s your gross income or proceeds, not your net profit.

Annuity

An annuity is a series of payments purchased with a lump sum, usually from a life insurance company or registered organisation.

Annual entitlement for a capped defined benefit income stream

Your annual entitlement to a superannuation income stream is worked out by reference to the first payment you are entitled to receive after the valuation is required.

You need to 'annualise' the first payment you are entitled to receive from the income stream.

The formula you use depends on the type of pension you receive:

• If you are receiving a lifetime pension or annuity, your special value is your annual entitlement multiplied by 16.
• If you are receiving a non-commutable life expectancy or market-linked product, your special value is your annual entitlement multiplied by the number of years (rounded up to the nearest whole number) remaining in that product.

Annual GST information report

Option 2 for GST reporting (i.e. pay and claim actual GST amounts and report only GST on sales, GST on purchases and total sales each quarter) means that you do not report all of your GST information each quarter. At the end of the year, you will need to complete an annual GST information report, whereby you report the GST information that was not reported each quarter.

Annual GST return

Option 3 for GST reporting (GST instalments) means that you do not supply any actual GST figures each quarter. At the end of the year, you will need to complete an annual GST return, whereby you report GST information for the entire year. A payment may need to accompany this return (or a refund may be due).

Approved auditor

An auditor registered with the Australian Securities and Investment Commission (ASIC).

Approved deposit fund (ADF)

Are mainly rollover vehicles. They cannot accept contributions directly from contributors in the same way as super funds. They only accept termination payments after you take early retirement, change jobs or are retrenched. They must pay out a member's benefits when they reach 65 years old and they cannot pay a pension.

APRA-regulated fund

A super fund regulated by the Australian Prudential Regulation Authority (APRA). APRA-regulated funds must be able to send and receive electronic messages and payments using the SuperStream standard.

Arm’s length

Dealing at market value.

Assessed excess transfer balance tax

Assessed excess transfer balance tax is the amount of excess transfer balance tax you are liable to pay on a notice of assessment issued to you.

Assessment

Assessment of an assessable amount, means an ascertainment of the assessable amount.

Assessment in relation to a tax-related liability other than an assessable amount, has the meaning given by the taxation law that provides for the assessment of the amount of the liability.

Assessable amount (for indirect tax laws)

An assessable amount includes a net amount, a net fuel amount, an amount of indirect tax and a credit under an indirect tax law.

Assessable amount (for eligible termination payments)

The specified amount of an eligible termination payment that is to be included on your tax return. It is usually a cash payment.

Assessment by the Commissioner

A limited number of taxpayers, such as non-business taxpayers claiming fuel tax credits, are not able to self-assess. Instead the Tax Office must make an assessment from the information provided by the taxpayer and issue the taxpayer with a notice of assessment.

Assessable income

Gross income including salary and wages, dividends, interest and rent before any deductions are allowed. Assessable income also includes net capital gains, ETP and other amounts that are not ordinarily classed as income.

Asset

Any form of property.

Associate

Broadly, as an individual, your associates include but are not limited to:

• your relatives, such as your spouse or children
• a partnership you are a partner in
• another partner in that partnership and that partner's spouse and children
• a trustee of a trust that you, or your associate, are a beneficiary of
• a company that you, or your associate, control or influence.

Similar rules apply to work out who is an associate of a company, partnership and trust.

Associated earnings

Associated earnings are an amount calculated to approximate the amount earned from the excess non-concessional contributions while they were in your super fund.

Associated employee

An employee who has a controlling interest in a company or partnership, or is related to a person who has a controlling interest in a company or partnership.

ATO Beta

ATO Beta is a place where we can try out new digital services and designs with real people.

ATO online services

Audit

Auditor

Auditor/actuary contravention report

Australian business number (ABN)

Australian Business Register (ABR)

Australian resident

Australian Securities and Investments Commissioner (ASIC)

Authorise

Authorised Deposit-Taking Institution (ADI)

Average weekly ordinary times earnings (AWOTE)

Bad debt

Money which is owed and is unlikely to be paid back.

Bank reconciliation

A means of checking that your financial records agree with those held by your financial institution. A bank reconciliation also establishes the correct balance in your bank account after adjusting for transactions such as deposits not yet banked and cheques not yet presented.

BAS agent

A BAS agent is a person, partnership or company registered with the Tax Practitioners Board (TPB) and provides BAS services for a fee or other reward, including advice, preparation, and lodgment of BAS.

Before-tax super contributions

Contributions to super which are made out of your salary before tax is withheld (gross salary), such as salary sacrifice contributions.

Before-tax contributions are also called:

• 'concessional' – as they are included in the member's concessional contributions
• 'taxable' – as the super fund must include them in its assessable income and pay tax on them
• 'deducted' – because the contributor may claim an income tax deduction.

Beneficiary

A person entitled to or in receipt of a benefit. For a super fund, this is normally the member or their financial dependants (or both).

The term beneficiary could also refer to an employee in the context of employment.

Benefit

For super, this means the amount you are paid as part of a super income stream, a lump sum amount or combination of the 2. It may also refer to an entitlement from your fund to which you, your estate or your dependants are entitled (or both).

Bona fide redundancy

A bona fide redundancy payment has all of the following characteristics:

• the employee was dismissed from a job, and did not leave voluntarily
• the employee was made redundant (their work has ceased or workplace has been relocated)
• the dismissal was made before the employee had to retire.

Bond (or Bond store)

Common term used for a licensed warehouse or other licensed premises where excisable (or customable including excise equivalent) goods may be stored without the payment of duty (also known as establishment).

BPAY

A payment system that facilitates electronic payments.

Bring-forward of non-concessional contributions

If you make contributions above the annual non-concessional contributions cap you may be eligible to automatically access future year caps. This is known as the bring-forward arrangement. It allows you to make extra non-concessional contributions without paying extra tax.

Eligibility for the bring-forward arrangement depends on your:

• age
• total super balance on 30 June of the previous financial year.

You may be able to contribute non-concessional contributions over 2 or 3 financial years without exceeding your cap.

Transitional arrangements exist for bring-forwards for 2015–16 and 2016–17.

See Bring-forward arrangements for more information.

Broken periods of service

This occurs where an employee's eligible service period (ESP) is not one continuous period of employment. An employee may have a broken period of service if, for example, they have taken leave without pay or maternity leave. If a benefit is being paid in respect of more than one continuous period of employment, the ESP is the total of each service period.

Bulk Electronic Clearing System (BECS)

The self-regulatory framework that supports the exchange and settlement of direct credit and direct debit transactions among banks, building societies and credit unions.

Business activity statement (BAS)

Businesses registered for GST use this single form to report their business tax entitlements and obligations, including GST, PAYG instalments, PAYG withholding and FBT instalments. You can offset tax payable against tax credits to arrive at an assessed net amount. The BAS replaces several business tax forms.

Business deductions

A series of expenses determined by tax law that can be deducted from your income.

Business Deployment Verification (BDV)

A production exercise that verifies business transactions, processes and system outputs function correctly after the release has been deployed into the production environment.

Business Implementation Guide (BIG)

The purpose of a BIG is to provide information that will assist software developers in understanding the business context of certain specific interactions. These interactions are performed with the ATO through the SBR platform.

Cap increment

A component of a child recipient’s personal transfer balance cap.

Cap space

This is the difference between your transfer balance account and the transfer balance cap – the amount of your unused transfer balance cap.

Capped defined benefit balance

The net amount of capital you have transferred to your superannuation retirement phase to support capped defined benefit income streams.

Capped defined benefit income stream

Capped defined benefit income stream (other than a market-linked capped defined benefit income stream) including:

• lifetime pension SISR 1.06(2)
• lifetime annuity SISR 1.05(2)
• life expectancy pension SISR 1.06(7)
• life expectancy annuity SISR 1.05(9)
• any other equivalent types of income streams as specified in the law.

These are generally income streams which cannot be commuted.

Capital amount

The capital value of the benefit reduced by any excessive amount.

This amount is used to calculate the qualifying portion of the benefit.

Capital expenditure

Money spent on assets such as:

• plant and equipment
• goodwill
• buildings
• business names
• patents
• copyrights.

Capital gains tax

A tax on the profit obtained when selling an asset (most homes and motor vehicles are exempt from this).

Capital value

The equivalent lump sum value of a pension at the start date. There are different ways to calculate the capital value of each type of pension or annuity. For example, the capital value of:

• an allocated pension is based on the amount used to purchase the pension
• a rebateable (lifetime) super pension is based on the payments made in the first year (the pension valuation factor) and the level of undeducted contributions and residual capital value.

Carry-forward of unused concessional contributions

Carry-forward arrangements allow you to make extra concessional contributions without paying extra tax. It involves accessing unused concessional cap amounts from previous years. An unused cap amount is when your concessional contributions in a financial year were less than the general concessional contributions cap.

To use your unused caps you need to meet 2 conditions:

• Your total super balance is less than $500,000.
• You make concessional contributions in the financial year that exceed your general concessional contributions cap.

See Carry-forward unused concessional contributions for more information.

Cash accounting

If you issue (or receive) an invoice but do not account for the sale (or purchase) until the cash is received (or paid), you are using a cash basis of accounting. You can use the cash basis if your annual turnover is $1 million or less.

Note: 'Account on a cash basis' is a defined term in GST law.

Cash book

A book that records all of your business transactions - whether by cash, cheque or credit card.

Cash flow

How much money is coming into your business and how much is going out.

CGT exempt component

A benefit may have this component if the member has sold business assets and was entitled to a capital gains tax (CGT) exemption.

Charitable purposes

Charitable purposes are the following:

• advancing health, education, social or public welfare, religion, culture, the security or safety of Australia or the Australian public, the natural environment
• promoting reconciliation, mutual respect and tolerance between groups of individuals that are in Australia, or protecting human rights, or opposing a change to any matter established by law, policy or practice that relates to one or more of the charitable purposes
• preventing or relieving the suffering of animals
• any other purpose beneficial to the general public that is reasonably analogous to, or within the spirit of, any of the above purposes.

Charity

An entity that is non-profit and all of its purposes are either charitable purposes for the public benefit, or ancillary or incidental to, and in furtherance of, a charitable purpose for the public benefit.

A charity cannot be an individual, government entity or political party.

The Australian Charities and Not-for-profits Commission determines whether an entity is a charity.

Child

A child is also taken to be your child in each of the following:

• your adopted child, stepchild or ex-nuptial child
• your spouse's child
• someone who is your child within the meaning of the Family Law Act 1975.

Child death benefit income stream

A dependent child that receives a death benefit income stream because of the death of a parent.

Child reversionary income stream

A superannuation income stream that automatically reverts to a nominated dependent child beneficiary on the death of a parent. The cap increment is deferred for 12 months.

Commissioner's remedial powers

A discretionary power the Commissioner can use to resolve general issues where the current law is producing unintended, negative impacts for you, or where it is creating excessive compliance costs.

Commodity

Product or goods that attract an excise. Currently commodities for excise purposes fall into the following main groups:

• alcohol
• petroleum
• tobacco
• coal.

Commutation

The process of converting fully or partially a pension or annuity into a lump sum payment which can be paid out of the super system, or transferred to an accumulation phase account. This payment can be paid to the beneficiary, or rolled over to another product within the same super fund or to another super fund.

Commutation authority

A Commutation authority is a notice the Commissioner issues to a super income stream provider requiring the provider to commute an amount from a specified super income stream where the member has exceeded their transfer balance cap.

Company

A separate legal entity that is taxable on its net taxable income.

For tax law purposes, a company includes either:

• a body corporate
• any other unincorporated association or body of persons.

However, it does not include a partnership or a non-entity joint venture.

Companies need to obtain a tax file number and where appropriate register for an Australian business number.

Note: 'company' is a defined term in tax law.

Complying pension or annuity

A pension or annuity where all of the following applies:

• provided under rules of a super fund
• payment started before 20 September 2007
• that meets the standards of Superannuation Industry (Supervision) Regulations 1994 subregulation 1.06(2), 1.06(7) or 1.06(8).

There are conditions that must be met when the pension is commuted.

Complying superannuation funds

A complying super fund has:

• elected to be regulated by either APRA or the ATO
• complied with the regulatory provisions as defined in the Superannuation Industry (Supervision ) Act 1993 (SISA)
• not received a notice of non-compliance.

Complying super funds that meet SISA standards qualify for a concessional tax rate of 15%.

Compulsory release authority (CRA)

We send you this release authority when we issue you with an excess non-concessional contributions tax assessment. You must use the compulsory release authority to withdraw the required amount from one or more of your super funds. You can ask the super fund to pay the money to you or to us. You must give the release to the super fund within 21 days of the date on the release authority.

Concessional component

A benefit will have a concessional component if it was made before 1 July 1994 and includes an invalidity payment, bona fide redundancy or approved early retirement scheme payment.

It will also apply to a payment made after that date that arose from a roll over to a super fund and the entitlement to those components can be attributed to the period before 1 July 1994.

Concessional contributions

Concessional contributions are contributions that are made into your super fund before tax. They are taxed at a rate of 15% in your super fund.

Concessional contributions include:

• employer contributions
• personal contributions you are allowed as an income tax deduction
• notional taxed contributions if you are a member of a defined benefit fund (including constitutionally protected funds for 2017–18 onwards)
• unfunded defined benefit contributions
• some amounts allocated from a fund reserve
• certain family and friend contributions (unless you are under 18 years of age).

See Concessional contributions and contribution caps for more information.

Concessional contributions cap

This is the limit on the amount of concessional contributions you can make to your super fund each financial year without having to pay extra tax.

From 2019–20, your cap may be higher if you did not use the full amount of your cap in earlier years (but not before 2018–19). This is called the carry-forward of unused concessional contributions cap.

For the current concessional contributions cap, refer to Key superannuation rates and thresholds.

Concessional spirit approval (concessional permit)

Approvals/permits we issue to clients to use spirit for concessional use (e.g. as a solvent, hospital use, food flavouring etc). These permits allow the spirit to be delivered with a concessional (free) rate of duty. A separate permit is issued for each type of spirit or use.

Concessional use

For commodities used for approved purposes (for example, spirit used in the manufacture of medicines, i.e. medical purposes) that attract an amount less than the full rate of excise and are entered under a separate tariff or instrument (e.g. Item 2M) to indicate concessional use.

Conditions of release

An event which enables you to access some or all of your super benefits.

Common conditions of release include:

• retirement
• reaching 65 years old
• reaching preservation age and retiring
• death
• permanent incapacity
• termination of employment if your benefit is less than $200.

Benefits can only be paid if the rules of your super fund allow it.

Connected with you

An entity that:

• is controlled by you
• controls you
• is controlled by another entity that also controls you
• is controlled by your affiliate
• is controlled by you together with your affiliate
• is controlled by an entity that you control (see the indirect control test).

Constitutionally protected fund

A fund is constitutionally protected if it has been declared as such under the Income Tax Regulations 1936.

Generally, a fund is constitutionally protected if its assets are owned by a state, rather than held in trust. As the constitution limits the Australian Government's taxing power, income derived by these funds is exempt from tax.

Contract workers

Independent contractors or contract workers generally provide for their own income tax liability by paying PAYG instalments. Individual contract workers can, if they meet certain conditions enter into a voluntary agreement to have an amount withheld, with their payers. Payments subject to withholding under a PAYG voluntary agreement are not included in PAYG instalment income for paying PAYG instalments.

Contributions splitting application

An application you make, as a member of a super fund, asking your fund to roll over, transfer or allot an amount of contributions for the benefit of your spouse. The total amount to be split in a financial year cannot be more than the maximum splittable amount of your contributions in the relevant financial year. The application may need to include an eligibility statement by your spouse (the receiving spouse).

Contributions tax

The tax payable by your super provider on the assessable income of the fund. The assessable income of the fund includes contributions such as:

• super guarantee and employer contributions
• salary sacrifice contributions
• investment earnings
• personal contributions for which you have been notified that they are claiming a deduction.

The current rate of tax on the assessable income of a complying super fund is 15%.

Creditor

A person or business to whom your business owes money.

CRT Alert

An ad-hoc email service sent out to super funds, administrators and other stakeholders providing updates and information about issues in relation to their reporting obligations and ATO system issues.

Crystallised reduction amount

An individual’s excess transfer balance that the Commissioner has determined is required to be removed from the retirement phase. This is made up of capital excess and associated earnings on the excess.

Customs and importations

For GST, WET and LCT payable on importations, the ATO is treated as having made an assessment and to have served a notice of assessment if both of the following apply:

• an import declaration has been received by Customs
• Customs has provided an import declaration advice.

The import declaration and the import declaration advice, together, are treated as being a notice of assessment.

Customs broker

The holder of a Customs Agent's licence who acts on behalf of a client in relation to the importation of goods.

Customs duty

Duty payable on imported (excise equivalent) goods at the rate determined by the Customs Tariff Schedule.

Customs licence

A licence to warehouse imported goods.

Data message

The information (such as member, super fund and payment) sent electronically in support of a super payment.

Dealings

Transactions or relations with others, usually in business.

Death benefit

A payment made on the death of an employee or super fund member. A death benefit may be paid to a beneficiary as a lump sum or as an income stream (pension or annuity).

Death-benefit termination payment

A lump sum payment made to a beneficiary because of the death of an employee or super fund member that is made within s6 months of death or 3 months of probate being granted.

Debit value

For a lifetime pension or annuity, the debit value is the amount of the transfer balance credit in respect of the income stream less the amount of any transfer balance debits (except from a payment split) in respect of the income stream. For a term or market linked pension or annuity, the debit value is the special value of the interest at that time.

Debtor

A customer or client who owes your business money.

Decline in value

You can deduct an amount for the decline in value of a depreciating asset that you hold in an income year to the extent you use the asset (or have it installed ready for use) for a taxable purpose, such as for producing assessable income. Generally, decline in value is calculated using either the diminishing value method or the prime cost method. Both methods are based on the asset's effective life.

Deductible gift recipient (DGR)

An entity that is entitled to receive income tax deductible gifts. All DGRs have to be endorsed, unless they are named specifically in the income tax law. There are 2 types of DGR endorsement. One is for entities that are DGRs in their own right. The other is for an entity that is a DGR only in relation to a fund, authority or institution that it operates. For the second type, only gifts to the fund, authority or institution are tax deductible.

Deductions

Money you spend to enable you to earn income – allowable deductions only - such as stationery, equipment, rent, electricity, telephone and tools. The value of the deduction is subtracted from assessable income to calculate your taxable income.

Deemed notices of assessment

In cases where we are deemed to have made an assessment, the returns (for self assessment) or the import declaration and advice (for liabilities on importations) are taken to be the notice of assessment.

Where a deemed assessment does not apply, we must issue a notice of assessment.

De facto relationship

A relationship between 2 people (whether of the same or opposite sex) who, although not legally married to each other, live together as a couple on a genuine domestic basis.

Default commutation notice

A default commutation notice is the notice you receive from the Commissioner when an excess transfer balance determination is issued to you. A default commutation notice lists the superannuation interest or interests to which the Commissioner will issue one or more commutation authorities to, if you do not elect to commute a different superannuation income stream.

Default fund

The (employer-nominated) super fund an employee's super guarantee contributions will be paid to, if they have not chosen an alternate super fund.

Deferred annuity

An annuity that is not payable on purchase. There are additional terms specified for deferred annuities. For more information about these terms, refer to subregulation 5.01(1) of SISR.

Deferred superannuation income stream

A right to receive a benefit in the future, such as a guaranteed annuity or group self-annuity.

Defined benefit income

Income you receive from a defined benefit (that is, capped defined benefit) superannuation income stream.

Defined benefit income cap

The amount of superannuation income stream benefits an individual can receive from capped defined benefit income streams before being subject to additional income tax. If your annual benefits from the capped defined benefit income streams exceed the ‘defined benefit income cap’, you may need to include part of the excess amount in your assessable income. Your entitlement to the tax offset may also be affected. The defined benefit income cap began on 1 July 2017 at $100,000, this may be reduced in certain circumstances and is indexed in future years in line with the general transfer balance cap. For more information, refer to Defined benefit income cap rates.

Defined benefit income stream (also known as capped defined benefit income streams)

Superannuation income stream benefits an individual receives from a capped defined benefit income stream.

Defined benefit pension, fund or scheme

A defined benefit plan uses a predetermined formula to calculate a member's entitlements.

The formula may use the following information:

• a member's salary, or allowance in the nature of salary, at a particular date or averaged over a period
• a specified amount
• specified conversion factors.

Departing Australia Superannuation Payment (DASP)

A payment made to a former temporary resident who accumulated super while working in Australia. DASP can be claimed by former temporary residents (if they meet the criteria) from their super fund.

Department of Immigration and Border Protection (DIBP)

Department of Immigration and Border Protection (now known as the Department of Home affairs).

Dependant

You are a dependant of the deceased if at the time of their death you were:

• their spouse or de facto spouse, including different or same sex
• a former spouse or de facto spouse, including different or same sex
• a child of the deceased who is under 18 years old
• in an interdependency relationship with the deceased
• any person the deceased dependant on the deceased.

An 'interdependency relationship' exists if 2 people satisfy all of the following:

• have a close personal relationship
• live together
• provide each other with financial support or domestic support and personal.

Refer to Death benefits for more information.

Depreciating asset

An asset that has a limited effective life and can reasonably be expected to decline in value over the time it is used. Items of plant and equipment are, generally, depreciating assets but land, trading stock and most intangible assets are not.

Disability superannuation pension/disability annuity

A pension or annuity payable to a person where 2 legally qualified medical practitioners have certified that due to disability the person is unlikely to ever be employed in a capacity for which they are reasonably qualified by education, training or experience.

Dividend

Generally a distribution from a company to a shareholder out of company profits.

Division 293 tax

An additional tax on super contributions for high income earners.

Downsizer contribution

Individuals who meet all of the eligibility requirements can make a downsizer contribution into superannuation of up to $300,000 from the proceeds of sale of their main residence.

Drawback

A drawback occurs where excise duty has been paid and the goods have been exported and the client is entitled to a refund of that amount of excise duty paid.

Drawings

Money a sole trader or partner withdraws from the business.

Effective date

This is the actual date that a posting will affect an account - for the purposes of determining the daily balance and calculating the general interest charge (GIC). The effective date takes into account any temporary or permanent extension, public holidays and weekends.

Effective date for income tax refund

An effective date is the date the transaction takes effect on the account. For debt amounts this is the payment due date, for credit amounts this is the date the credit balance becomes available to refund or offset.

Effective life

The effective life of a depreciating asset is, broadly, the period it can be used by anyone for income-producing purposes assuming reasonable wear and tear, that it will be maintained in reasonably good order and condition and having regard to the period within which it is likely to be scrapped or abandoned.

Electronic funds transfer (EFT)

Payments from us can be made electronically by direct credit to a valid Australian bank, credit union or building society account.

Payments to us can be made electronically by BPAY, credit card, direct credit or direct debit.

Electronic payment destination

The method used by employers and funds to make payments electronically. SuperStream payments can be made by either BECS or BPAY.

Electronic portability form (EPF)

An ATO-hosted form that can be used by fund members to transfer the whole balance of super accounts between APRA-regulated funds, or to the member's self-managed super fund.

Electronic service address (ESA)

Identifies where the super contribution data message is sent for a particular fund. It can be an Internet Protocol (IP) address, uniform resource locator (URL) or an alias.

For SMSFs, this is known as the electronic service address alias, and is obtained from a SMSF messaging service provider.

Eligibility statement

A signed statement from the receiving spouse stating that they are either aged less than their applicable preservation age or are aged between their applicable preservation age and 65 years and have not permanently retired.

Eligible service period

Applies to benefits before July 2007. This is the period from the day your membership of a super fund or employment started through to the day your membership of the fund or employment ceased.

Employee

A person who receives salary or wages.

Employee share scheme

Under an employee share scheme (ESS), a company provides its employees with interests in the company (shares, stapled securities, rights to shares or rights to stapled securities), collectively known as ESS interests. Changes to employer and employee reporting and elections on ESS came into effect 1 July 2009. There is also an income test for the ESS $1,000 upfront tax concession.

See more information for Employers.

See more information for Employees.

Employer contributions

Contributions employers make to a super fund for their employees (sometimes referred to as super guarantee contributions). These are tax deductible (subject to certain rules) for employers and are assessable contributions for the super fund. Employer contributions are not assessable income to the member of the fund (the employee). This means that they are not:

• included in the gross payments on an employee's payment summary
• subject to pay as you go (PAYG) withholding tax.

One exception is reportable employer super contributions. Amounts that an employee chooses to salary sacrifice (before-tax contributions) are treated as employer contributions for super guarantee purposes and must be reported.

Employer contributions in excess of the age based limit

Age-based limits no longer apply from 1 July 2007.

Amounts in excess of the age-based limits are unable to be claimed by employers as a deduction.

In the 2006–07 financial year, these amounts are transitional non-concessional contributions and count towards the $1 million transitional non-concessional contributions cap.

EmployerTICK

An online service employers can voluntarily use to validate employee details, prior to making the first contribution to a super fund.

Employment termination payment (ETP)

A lump sum paid to you when your employment is terminated. These payments must be made within 12 months of termination and usually receive concessional income tax treatment.

Enterprise

An enterprise includes a business. It also includes other commercial activities but does not include any of the following:

• private recreational pursuits and hobbies
• activities carried on as an employee, labour hire worker, director or office holder
• activities carried on by individuals (other than the trustees of charitable funds) or partnerships (in which all or most of the partners are individuals) without a reasonable expectation of profit or gain.

Note: Enterprise is a defined term in GST law.

Entity

An individual (for example, a sole trader), a body corporate (a company), a corporation sole, a body politic, a partnership, an unincorporated association or body of persons, a trust, or a super fund.

E-tax (for individuals only)

MyTax replaces e-tax from 1 July 2016. MyTax is the quick, easy, safe and secure way to prepare and lodge your own tax return online. It has been upgraded to do everything e-tax could do, plus extra things it couldn't.

ETP payment summary

The employer or super fund must provide this form to the recipient within 14 days of making the employment termination payment (ETP). This form shows the ETP component details and tax withheld from an ETP. These details or those contained in an Excessive ETP determination notice must be used when completing a tax return.

Excess concessional contributions

The amount of concessional contributions to super in a financial year which is more than your cap.

If you exceed your cap:

• you must lodge a tax return for that year
• we send you a determination letter after you have lodged your tax return
• the excess concessional contributions are included in your assessable income.

You may elect to withdraw up to 85% of your excess concessional contributions to help pay your income tax liability.

If you do not or cannot release your excess concessional contributions, they will count towards your non-concessional contributions cap.

See If you exceed your concessional contributions cap for more information.

Excess concessional contributions tax

Excess concessional contributions for 2012–13 and earlier years were taxed at 46.5% as follows:

• 15% of the tax was applied in the super fund
• 31.5% of the tax was payable in the ECT assessment.

If you exceed your concessional contributions cap for 2012–13 and earlier years, we will send you an ECT assessment and a voluntary release authority.

See Contributions for 2012–13 and earlier years for more information.

Excess contributions tax assessment

For 2012–13 and earlier years, if you exceeded your concessional or non-concessional contributions cap you needed to pay excess contributions tax (ECT).

If we identify you have excess contributions, we will write to you so you can check our information. If it is, we will send you an ECT assessment telling you how much you need to pay. The ECT assessment can cover both:

• excess concessional contributions tax
• excess non-concessional contributions tax.

An assessment may still issue if you choose to pay ECT or amounts cannot be released from a defined benefit fund.

See Contributions for 2012–13 and earlier years for more information.

Excess non-concessional contributions

The amount of non-concessional contributions to a super fund in a financial year which is more than your non-concessional contributions cap.

If you exceed your non-concessional contributions cap:

• we will send you a determination which explains your options
• you must lodge a tax return for that year
• you may have to release money from your super
• you may need to pay extra tax.

See If you exceed your non-concessional contributions cap for more information.

Excess non-concessional contributions tax

Excess non-concessional contributions for 2012–13 and earlier years were taxed at 46.5%.

You must use the compulsory release authority to remove the ENCC tax amount from your super fund, even if you have paid the tax from your own money. If the ENCC tax amount is not released from your fund you could be penalised up to 20 penalty units.

Excess transfer balance

The amount by which an individual’s transfer balance exceeds their personal transfer balance cap on a particular day (unless the excess is attributable to the individual’s capped defined benefit balance).

Excess transfer balance determination

A written determination issued to you by the Commissioner if you have an excess transfer balance.

A determination will state your ‘crystallised reduction amount’ which will equal your excess transfer balance on that date. This includes excess transfer balance earnings up to that date. You must remove the crystallised reduction amount from retirement phase to bring your transfer balance account back in line with your transfer balance cap.

An excess transfer balance determination will also include a default commutation notice.

Excess transfer balance earnings

The notional earnings added to your transfer balance account when you have an excess transfer balance at the end of a day.

Excess transfer balance period

The period from when you start to have an excess transfer balance, to when you cease to have an excess. An excess transfer balance period for a transfer balance account is a continuous period of one or more days during which, at the end of each day, there is excess transfer balance in the account.

Excess transfer balance tax

Tax imposed on excess transfer balance earnings over an excess transfer period. Excess transfer balance tax rate is 15% the first time you have an excess transfer balance and increases to 30% if you have an excess transfer balance for a second or subsequent time, after 1 July 2018.

Excess transfer balance tax - notice of assessment

The tax you are liable to pay in respect of excess transfer balance earnings that accrue in relation to any excess transfer balance that you have after an excess transfer balance determination has been issued.

Excise collections

The collection of revenue for excise business.

Excise duty or excise

A commodity-based inland tax on petroleum (including oil), tobacco and alcoholic products. It is administered by us. Excise duty is levied on the production of domestic goods, with an equivalent customs duty levied on similar imported goods (customs duty is administered by the Australian Customs and Border Protection Service).

Excise licence

A licence to manufacture, store, produce or deal in excisable goods.

Excise tariff

The Excise Tariff Act 1921 is the legislation (rules) that enables goods to be declared as being subject to Excise and determines rates of duty for excisable goods.

Exempt income

Income which is not taxable.

Expense

Money spent.

Financial year

The period from 1 July to 30 June.

First Home Saver Account (FHSA)

The scheme allows you to save money for your first home inside your super fund.

Fixed trust

Where entities have fixed entitlements to all of the income and capital of the trust.

Fund details register (FDR)

A register of rollover and contribution information provided by super funds.

Fund Validation Service (FVS)

A service that enables employers and funds to obtain APRA-regulated funds’ e-commerce details that support SuperStream transactions (including unique superannuation identifier, bank account details, and electronic service addresses). SMSF details are not included in the FVS.

Franking credit

Franking credits are income tax credits that a corporate tax entity can pass on to its members. Franking credits are credited in a corporate tax entity's franking account. A franking credit arise when a corporate tax entity does any of the following:

• makes a payment of a PAYG instalment or income tax
• receives a franked distribution
• incurs a liability for franking deficit tax.

Fringe benefits tax (FBT)

Tax payable on a non-salary benefit provided to an employee.

Fund-capped contribution limit

The maximum amount of non-concessional contributions a super fund can accept in a single contribution for a member. Your fund must return the excess amount within 30 days. From 1 July 2017 the fund-capped contribution limit has been repealed.

Gainfully employed

Gainfully employed is defined in the Superannuation Industry (Supervision) Regulations 1994 (SISR) (subreg.1.03(1)) and Retirement Savings Accounts Regulations 1997 (subreg.1.03(1)) to mean 'employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment’.

Gateways

Gateways facilitate the transfer of electronic data messages within the SuperStream network.

General interest charge (GIC)

A regime for calculating and imposing penalties including the penalty for late payment of all outstanding ATO related debts. The GIC is a commercially linked interest rate that compounds daily and varies every quarter with changes in the money market.

General transfer balance cap

An amount of $1.6 million in 2017–18 and indexed to the CPI in $100,000 increments.

Genuine attempt

Employers and super funds will be deemed to have made a genuine attempt to prepare for SuperStream if they have an implementation plan in place with a service provider and set a start date for sending or receiving their first SuperStream-compliant transactions.

Gifts/donations

A donation to a recognised organisation or charity.

Golden handshake

An employment termination payment (ETP), which is a voluntary payment made to an employee on retirement or termination of employment.

Goods and services tax (GST)

The GST is a broad-based tax of 10% on most supplies of goods and services consumed in Australia. On 1 July 2000 the GST replaced wholesale sales tax which was applied at varying rates to a range of products.

Goodwill

The value placed on the reputation of an established business.

Gross income

The total income before business and tax deductions are accounted for.

Gross salary

The amount of money earned before tax is deducted.

Gross tax

The tax on taxable income before tax offsets are taken into account.

GST-free supplies

You do not charge GST on GST-free supplies, but you are entitled to input tax credits for the GST included in the price you paid for the things you acquired to use in your business.

Health promotion charity (HPC)

An institution whose principal activity is to promote the prevention or the control of diseases in human beings. The characteristics of a HPC are:

• it is a charity
• it is set up to promote the prevention or control of disease(s) in human beings
• it is an institution.

Higher Education Contribution Scheme (HECS)

From 2005, HECS was renamed to Higher Education Loan Program (HELP). HELP provides loan schemes to help eligible Commonwealth supported students pay their student contribution amounts through a loan. Repayment of the loan is administered through us.

Higher Education Loan Program (HELP)

The Australian Government administers HELP loans which consists of 5 schemes to assists eligible students with their student contribution or tuition fees. Repayment of the loan is administered through us.

Immediate annuity

An annuity where a current liability exists for payment.

Importations

For GST, WET and LCT payable, we are deemed to have made an assessment and to have issued a notice of assessment where an import declaration or a self-assessed clearance declaration has been given to Customs and Customs have issued an import declaration advice or a self-assessed clearance declaration advice.

Inactive account

An inactive account is a member account that has not received contributions for a period of f5 years. All inactive accounts are reported to the ATO on the LMS.

Inactive member

An 'inactive' member is defined as lost due to inactivity, has not been reported as lost in a previous reporting period or does not meet the definition of a small or insoluble account.

Income

The amount of money earned from personal exertion and investments.

Income for surcharge purposes

Taxable income plus certain other income and losses declared by you. Your income for surcharge purposes and the income for surcharge purposes of your spouse (if you have one) are used to work out whether you have to pay the Medicare levy surcharge. Income for surcharge purposes was introduced on 1 July 2009. For more information about income tests, refer to Income tests.

Income requirement for non-commercial loss purposes

From the 2009–10 income year, you must meet the income requirement and then pass one of the 4 tests before being eligible to deduct your non-commercial loss from your other income.

You meet the income requirement if your income for non-commercial-loss purposes is less than $250,000.

Income for non-commercial loss purposes is the sum of all of the following:

• your taxable income (ignoring any business losses)
• your total reportable fringe benefits
• your reportable super contributions
• your total net investment loss.

Income stream

A series of regular payments over a period of time.

Income support

Pensions, benefits and allowances paid by the Australian Government.

Income tax

The amount of income paid to the Australian Government which is used to meet its expenses.

Income tax exempt charity (ITEC)

A charity that we have endorsed as exempt from income tax.

Indexation

A process of increasing the value of a benefit previously received in accordance with average weekly ordinary time earnings (AWOTE).

Indexation increase

The general transfer balance cap will be indexed periodically in $100,000 increments in line with CPI. The amount of indexation you will be entitled to will be calculated proportionally based on the amount of your available cap space. If, at any time, you meet or exceed your cap, you will not be entitled to indexation.

Indirect tax zone

Indirect tax zone means Australia but does not include the external territories and certain offshore areas.

Input tax credit

You are entitled to an input tax credit for the GST included in the price you pay for an acquisition or the GST paid on an importation if it is for use in your business, but not to the extent that you use the acquisition or importation to make input taxed supplies. You will need to have a tax invoice to claim an input tax credit (except for purchases with a GST-exclusive value of $50 or less).

Input taxed supplies

You don't charge GST on input taxed supplies, but neither are you entitled to input tax credits for the GST included in the price you paid for the things you acquired to make the supplies.

Instalment

A part or portion of an amount of tax due which is paid at regular intervals.

Instalment activity statement (IAS)

A form similar to the BAS but without GST and some other taxes. Businesses that are not registered for GST, and individuals who are required to pay PAYG instalments or PAYG withholding (such as self-funded retirees), use this form to pay PAYG.

Intangible asset

An asset that is not physical in nature, such as a patent, brand, trademark, copyright, goodwill and intellectual property.

Interest

Money earned from investments, or may be accrued or owed as part of a loan, debt or other financial obligation.

Interest split

If there is a payment splitting agreement or court order following marriage breakdown that affects a super interest, it is possible:

• for a new interest to be created for the non-member spouse's super fund
• for the non-member spouse entitlement to be transferred into that existing super interest
• for the non-member spouse entitlement to be rolled over into a new super interest.

The amount that is credited to the new interest, transferred or rolled over to another fund, reflects the non-member spouse's entitlement under family law.

Interim determination notice

A notice we issue when an employer or super fund does not provide sufficient information to us - for example, the recipient's TFN. An interim determination notice issued as a result of non-provision of a TFN will always be an excessive determination. If the missing information is not provided, the interim determination notice becomes the final determination notice.

This notice must be used to complete their tax return.

Intermediaries

See – Service providers.

Interposed entity

An individual, company, partnership or trust that is inserted between a private company and its shareholder or their associate.

Invalidity payment

A payment made if you enter into early retirement due to a permanent disability. The amount of an invalidity payment is linked to your future service period (that is, the period that you would have worked if not for the permanent disability).

The payment must be as a result of termination of employment and occurred because:

• 2 legally qualified medical practitioners certify that your disability is likely to prevent you from ever being employed in a capacity for which you are reasonably qualified because of your education, training or experience
• the termination of employment is before the last retirement date.

Invest

Apply assets (money) for the purpose of gaining interest, profit or gain.

Involuntary Superannuation Account Transfer (ISAT)

Where super providers transfer member accounts without members’ consent or instigation. This includes successor fund transfers, transfers to MySuper products and transfers to eligible rollover funds.

Labour hire

Labour hire arrangements commonly involve at least 2 contracts. A user of labour (the client) typically contracts with a labour hire firm for the provision of labour of a specified kind. The labour hire firm does not contract to perform the work; it merely contracts with the worker and pays the worker. The worker is not an employee of the client and there is no contract between the worker and the client. The worker may or may not be an employee of the labour hire firm.

Legislative Instrument (LI)

Legislative instruments are laws on matters of detail made by a person or body authorised to do so by an Act of the Parliament. The Commissioner has the power to make legislative instruments that, although subordinate to the principal legislation, determine how the legislation applies in particular circumstances.

Let’s Talk

An online collaboration community for you to contribute your ideas and have your say on tax and super topics.

Liability

A debt or financial obligation incurred.

Life-benefit termination payment

An employment termination payment made as a result of termination of a person's employment, other than as a result of their death.

Life expectancy/15 year pension/annuity

These pensions or annuities meet the pension and annuity standards. They are payable for a fixed term equal to life expectancy, or a minimum term of 15 years if life expectancy is more than 15 years.

Benefit payments are made at least annually and the total of those payments in each year is fixed, allowing for variation only in accordance with prescribed indexation limits.

Lifetime pension/annuity

Often called 'super pensions'. A lifetime pension or annuity may meet the pension and annuity standards.

The key features of a benefit that meets the pension and annuity standards are:

• they are payable for the life of the member, or for the reversionary beneficiary's life on the death of the member
• payments must be made at least annually, they are a fixed amount and generally only varied by indexation
• they are non-commutable, except in limited circumstances.

Life benefit termination payment

An employment termination payment made as a result of termination of a person's employment, other than as a result of their death.

Lodgment deadline

For self-preparers the lodgment deadline is 31 October each year. For those who use a tax agent make sure you are registered with your agent before 31 October. If you missed the deadline it’s best to lodge as soon as possible to avoid penalties.

Lost member

You are a lost member if any of the following applies (subject to certain other conditions):

• a super fund can't contact you
• a contribution has not been received on behalf of you for the last 5 years
• you transferred from another super fund as a lost member.

Funds must report lost member details to us. Lost member's super remains in their fund, but is paid to us if either:

• the balance is less than $200
• the account is inactive for 5 years, the fund is confident that it will never pay an amount to the member (an insoluble lost-member account), and the account does not support or relate to a defined benefit interest.

Lost member statement (LMS)

A statement where super funds report information to us about lost, inactive, found and transferred members’ accounts.

Lost members register (LMR)

A central register of lost super fund members and retirement savings account holders administered by us.

For more information, refer to Lost members register for super providers and Searching for lost super.

Low income super contribution (LISC)

A government payment designed to increase the super savings of people with low incomes. LISC was repealed from 1 July 2017 and replaced with the low income super tax offset (LISTO).

Low income super tax offset (LISTO)

A government payment designed to increase the super savings of people with low income. Eligible individuals with an adjusted taxable income up to $37,000 receive the low income super tax offset into their super account. It is calculated as 15% of concessional contributions with the maximum payment being $500.

Low rate cap (LRC)

Applies from 1 July 2007. The amount is a life time limit, indexed annually, used to make sure super lump sum payments are taxed correctly when you are aged 55 to 59. The LRC is reduced by any amount previously applied to the low rate threshold.

If you receive one or more super member benefits that are super lump sums in an income year, the LRC amount is reduced for the next income year by the total of the amounts that both:

• are included in your assessable income for the first year for those lump sums
• are counted towards your entitlement to a tax offset.

Low rate threshold (LRT)

The limit for lower tax treatment of components of an eligible termination payment after June 1983. The low rate threshold applies if you are 55 years old or over at the date of payment. It is a lifetime limit that is indexed each financial year.

The LRT has been replaced by the low rate cap (LRC) from 1 July 2007.

Lump sum

A benefit taken as a single payment - for example, an eligible termination payment. This is different to a pension or annuity, which is a series of payments and are in the nature of income rather than capital.

Luxury car tax

Luxury car tax is a tax of 33% imposed on luxury cars over the luxury car tax threshold, which is indexed annually. Luxury car tax is generally payable when a car is sold or imported at the retail level. It is in addition to any goods and services tax (GST) payable.

Marginal tax rate

The rate of tax applicable to the income range which the person's taxable income is in.

Market linked capped defined benefit income stream in existence just before 1 July 2017

Market-linked capped defined benefit income streams include:

• market-linked pension SISR 1.06(8)
• market-linked annuity SISR 1.05(10)
• market-linked pension RSAR 1.07(3A)
• any other equivalent types of life income streams as specified in the law

which were in existence just before 1 July 2017.

Market linked income stream

A market-linked pension or market-linked annuity that meets the pension and annuity standards. They became available on 20 September 2004 and are a flexible pension or annuity in terms of how investments are managed. The key features of these income streams are:

• the term is based on life expectancy
• the payment must be paid at least annually
• the payment amount is based on the remaining term of the pension and the account balance on 1 July each year
• they are subject to concessional social security treatment for working out eligibility for the age pension
• they are non-commutable, except in limited circumstances.

Marriage breakdown

Changes introduced in the Family Law Legislation Amendment (Superannuation) Act 2001 allow a super interest to be divided by agreement or a court order following marriage breakdown. The Act started on 28 December 2002.

Maximum contribution base

Under the super guarantee (SG) scheme, this is the upper limit for the amount used to calculate the super contributions an employer must provide for their employee each quarter. The base is indexed annually.

From 1 July 2008, all employers must calculate their minimum SG obligation using an employee's ordinary time earnings (OTE). The amount of the employee's OTE is limited to the maximum contribution base. The base is also used when calculating an employee's SG shortfall.

From quarters commencing on or after 1 January 2020 the maximum contribution base for an employee will be nil if there is an SG exemption certificate (see SG opt out measure).

Maximum splittable amount

For super, the maximum splittable amount for the relevant financial year cannot be more than 100% of the untaxed splittable contributions and 85% of the taxed splittable contributions made by, for, or on behalf of the applicant in the relevant financial year.

Medicare levy surcharge

Liability for Medicare levy surcharge arises if a taxpayer, or any of their dependants, does not have an appropriate level of private patient hospital cover and their income for surcharge purposes exceeds the relevant Medicare levy surcharge thresholds.

Medicare levy

An amount payable by most taxpayers to cover some of the cost of the public health system.

Medium-to-large employer

An employer with 20 or more employees.

Member Account Attribution Service (MAAS)

A service for super providers and life insurance companies to report the opening and closing of accounts, and changes to a member's account phases and attributes when they occur (event-based reporting).

Member Account Transaction Service (MATS)

A service for super providers and life insurance companies to report member contributions or transactions more frequently and at a transactional level.

Member commutation

The process of ceasing, in whole or in part, a superannuation income stream and converting it into a superannuation lump sum. The superannuation lump sum that arises from a commutation may be cashed out of the superannuation system or can be retained within the superannuation system (or both) subject to the cashing rules for superannuation death benefits.

Member Contribution Statement (MCS)

An annual statement super providers lodge with us to report contributions received for each member during the financial year, and the account balance and other attributes of the account the member held in the fund.

Member contributions

Member contributions are made by you or on your behalf. They include:

• personal contributions
• spouse contributions
• contributions by parents, other family or friends (not in the capacity of an employer)
• government co-contributions.

They exclude compulsory employer contributions, such as super guarantee.

Member spouse

For splitting a super interest due to marriage breakdown, this means the spouse who has the super interest or account.

Member Exit Statement (MES)

The statement contains information required to be reported by a constitutionally protected super fund (CPF) when a member leaves (exits) the CPF.

Message handler

A service provider that sends, receives or transforms data in a SuperStream-compliant format on behalf of a fund or employer.

Metadata

The background information about a web page. It includes information about the author, title, and the date the resource was created.

myGov

myGovID

MySuper fund

MyTax

NAT Number

A unique 'national number' that is allocated to each ATO form and publication.

Negative gearing

Borrowing money to make an investment, where the interest and allowable deductions exceed the investment income and can be claimed as a deduction against other types of income.

Net amount payable

The total amount you should pay us which includes your tax payable and your Medicare levy.

Non-arm's length

Not dealing at market value.

Non-arm's length business transaction

You discounted the goods or services you sold to someone because of their association with you.

Non-commutable

For a pension or annuity, this means it cannot be converted into a lump sum payment.

There are limited circumstances when a commutation is allowed, including:

• commutation within s6 months of the start of the pension or annuity – this applies to the original pension or annuity only
• in certain circumstances, to a reversionary beneficiary
• to purchase another pension or annuity that meets the pension and annuity standards
• to pay a super contribution surcharge
• to allow a payment for a payment split due to marriage breakdown.

Non-commutable allocated pension/annuity

These types of pensions or annuities became available on 1 July 2005 so you can start an additional income stream if you have reached your preservation age but not retired (transition to retirement).

These benefits have similar key features to an allocated pension/annuity, except additional cashing restrictions apply, especially for commutation.

You can return a non-commutable allocated pension or annuity to the growth phase.

Non-commutable excess transfer balance

Where you have an excess transfer balance and you have no remaining account-based superannuation income streams to be commuted.

Non-commutable pension/annuity

These types of pensions or annuities became available on 1 July 2005 so you can start an additional income stream if you have reached your preservation age but not retired (transition to retirement).

These benefits have similar key features to a lifetime, life expectancy or market-linked pension or annuity, except additional cashing restrictions apply. A commuted benefit can only be cashed in very limited circumstances.

You can return a non-commutable pension or annuity to the growth phase.

Non-concessional contributions

Non-concessional contributions are:

• generally from your after-tax income
• not taxed in your super fund.

See Non-concessional contributions and contributions caps for more information.

Non-concessional contributions cap

This is the limit on the amount of non-concessional contributions you can make to your super fund each financial year without having to pay extra tax. Unreleased excess concessional contributions are also counted towards this limit.

Your cap might be different. It can be:

• higher, if you can use the bring-forward arrangements
• nil, if your total superannuation balance is greater than or equal to the general transfer balance cap.

For the current caps, refer to Key superannuation rates and thresholds.

Non-deductible fund

A certain type of super fund whose members are ineligible to claim a personal superannuation contribution deduction. Funds include:

• Commonwealth public sector superannuation schemes with a defined benefit interest
• constitutionally protected funds or other untaxed funds that would not include the contribution in assessable income
• super funds that notified the Commissioner prior to the income year that they elected to treat all member contributions to the super fund, or treat all defined benefit interest within the fund, as non-deductible
• any other super fund of a kind that is prescribed by the regulations for this purpose.

Non-fixed trust

A trust that is not a fixed trust. For example, a trust where the trustee has the discretion to distribute the trust income to a beneficiary.

Non liability statement

There are a number of liabilities and benefits that do not relate to the liability statement, e.g. miscellaneous voluntary payments, licence fees, cash securities and demands for duty as a result of compliance activity.

Non-lodgment advice (NLA)

A form sent to us if you do not need to lodge a tax return.

Non-member spouse

For the splitting of a super benefit due to marriage breakdown, this means the spouse who is not the super fund member or account holder of the super benefit. In certain circumstances, a new interest can be created for the non-member spouse who is to receive payments under an agreement or order to split a super interest. In such cases, the non-member spouse is given similar membership rights to those of the member spouse.

Non-profit/not-for-profit (NFP)

An organisation is non-profit if it is not carried on for the profit or gain of its individual members. This applies for direct and indirect gains, both while the organisation is being carried on and on its winding up. We accept an organisation as non-profit if its constitution or governing documents prohibit distribution of profits or gains to individual members and its actions are consistent with the prohibition.

Non-profit company

A non-profit company for determining rates of income tax and whether to lodge income tax returns is either of the following:

• a company that is not run for the purposes of profit or gain to its individual members and is, by the terms of the company's constituent documents, prohibited from making any distribution, whether in money, property or otherwise, to its members
• a friendly society dispensary.

Non-profit sub-entity

Certain non-profit organisations, with independent branches (units), have the option of treating their units as if they were separate entities for GST purposes and not part of the main organisation. For endorsement as a deductible gift recipient (DGR) it is the entity, not the non-profit sub-entity that must apply.

Non-purchased pension

A pension that has not been purchased with an identifiable lump sum – for example, an account balance or employment termination payment.

Non-qualifying component

Very few benefits will have a non-qualifying component. It represents the earnings on any annuities that were purchased with non-super or employment termination payment money.

Non-rebatable pension/annuity

A pension or annuity for which the recipient cannot claim the pension tax offset. A non-rebatable pension is one paid from an untaxed source. These are usually public sector super funds which do not pay the 15% contribution tax. In some circumstances, part of a pension or annuity will be non-rebatable.

Notice of assessment (NOA)

The notice we send you when we process your tax return, which advises you about the tax you owe or refund you are entitled to.

Notional tax

Generally, the equivalent of tax that would have been payable on your business and investment income, excluding capital gains, for your most recent income year that an assessment has been made.

Notional taxed contributions

As contributions into defined benefit funds are not always linked to individual members, a notional amount of employer contributions is calculated to reflect the increase to your benefit for the year. This is the equivalent of an employer contribution, so this amount counts towards your concessional contributions cap.

Ordinary income

Income according to ordinary concepts. Generally, this is amounts that everyone would consider to be income.

Ordinary time earnings (OTE)

What you earn for your ordinary hours of work, including over-award payments, bonuses, commissions, allowances and certain paid leave. As a general rule they are used as the basis for measuring the level of employer super contributions under the Superannuation Guarantee (Administration) Act 1992.

For more information about what is included or excluded from ordinary time earnings, refer to Using ordinary time earnings to calculate the super guarantee.

Outgoings

Expenses.

Particular

A 'particular' is a constituent element that affects an increase or decrease in the assessable amount and in the context of GST, could be a single supply or a single acquisition provided it individually results in a change to the assessable amount.

Partnership

A group of people in business together.

Partnership income

The income that is earned exclusively by the partnership.

Pay as you go (PAYG)

A single, integrated system for reporting and withholding amounts of tax on business and investment income.

Payee

The person who receives a payment.

Payer

The person who makes a payment – for example, an employer or super fund.

Payment advice

Payment advice (slips) are printed stationery provided to the client to enable them to pay us using EFT, Australia Post Bill Pay or BPAY. We use details on the advice to identify a taxpayer and credit the amount of the payment to their account. Payment advice stationery must be to our specification.

Payment phase

A super interest is said to be in the payment phase when it is no longer in the growth phase. For example, a super interest will be in the payment phase if you have been paid a benefit as a result of meeting a relevant condition of release, and are not entitled to any other benefits from the fund.

Payment reference number

For SuperStream – a unique identifier that links the super payment and the data message.

Payment split

When a payment from a super interest becomes payable to the member spouse – usually because a condition of release has been met – a certain amount will be paid to the non-member spouse and the remainder will be paid to the member spouse.

Different treatment arises for the purposes of your transfer balance account depending on whether, under the payment split, the non-member spouse is entitled to either a lump sum amount or a percentage of the member spouse's superannuation income stream benefits payable from the superannuation income stream.

Payment summary

An advice given to you at the end of the financial year by your employer showing your earnings during the year.

Payment variation advice (PVA)

For super providers to let us know they cannot accept credit payments we have provided on a remittance advice for one or more members and/ or debit requests we have provided on a recovery notice for one or more members.

Payroll

The amount of money an employer pays in wages to their employees.

Penalties

Penalties can be imposed by us for offences in relation to taxation and superannuation legislation.

Pension

A series of regular payments made as an income stream, this may be provided by a super fund or retirement savings account.

Pension age

Determines your eligibility for certain government benefits, including the age pension. It is currently 65 years old for men and 63 years and 6 months old for women. It will gradually rise to 65 years old for women by 2014.

Pension and annuity standards

Standards that a pension or annuity must meet to be taxed as a super stream benefit. Among other things, the pension or annuity must:

• be payable for life or life expectancy (if life expectancy is 15 years or more, it must be payable for a term between 15 years and life expectancy)
• be paid at least annually
• only be commuted in limited circumstances
• have no residual capital value
• not be used as security for a borrowing.

Pension valuation factor (PVF)

Used to convert a pension to an equivalent lump sum for calculating the capital value. It is based on the age of the recipient at commencement of the pension, the level of reversion and the level of indexation. The pension valuation factors can be found in the Superannuation Industry (Supervision) Regulations (SISR) Schedule 1B.

Period of review

For indirect tax laws, once an assessment has been made, a 4-year period of review applies. During this time, we may amend a taxpayer's assessment at the taxpayer’s request or at our discretion.

Established liabilities and entitlements remain payable or refundable after the period of review ends.

The period of review starts on the day the taxpayer is issued with a notice of assessment (in most cases, this will be the same day the taxpayer lodges his or her return) and ends 4 years after the day after lodgment.

The period of review may be extended in certain circumstances to allow us to establish a liability that has not yet been assessed.

Periodic settlement

An arrangement where the client has approval to deliver goods into home consumption prior to entry and must:

• lodge a Customs Nature 40 entry form (N40)
• make payment for their excise liability at the end of the agreed period (weekly).

Permanent incapacity

Also called 'permanent disability'. This is when an individual is deemed to be unlikely to be gainfully employed in a job they are currently qualified, due to ill health.

See also:

• disability super benefit
• invalidity payment.

Permit

Our approval to receive excisable spirit, either undenatured or specially methylated at a concessional rate of excise duty.

Person

An individual but also includes a company or other entity that is considered a person for legal purposes.

Personal contributions

Personal super contributions are the amounts you contribute to your super fund from your after-tax income (that is, from your take-home pay). They include contributions paid on your behalf.

These contributions exclude:

• compulsory super contributions your employer makes on your behalf
• super contributions made through a salary-sacrifice arrangement.

Personal deductible super contributions

If you meet certain eligibility criteria, you can claim personal super contributions as a deduction on your tax return (see Claiming deductions for personal super contributions).

Personal injury

A personal injury is a legal term used to refer to physical or psychological harm or injury. A personal injury case may arise from:

• medical negligence
• sporting accidents
• motor vehicle accidents
• public liability
• product liability.

Personal injury payments are made through the settlement of a claim or the order of a court (see structured settlement).

Personal services entity

A company, partnership or trust through which a contractor operates to earn personal services income.

Personal services income

If a client is mainly paying for your personal skills or effort it is regarded as personal services income. Common examples of a person who earns this kind of income are any of the following:

• a medical or legal practitioner in a sole practice
• a professional sports person or entertainer
• a consulting engineer, computer consultant or other expert consultant
• a person working under a contract wholly or principally for labour or services.

If a company, partnership or trust (personal services entity), obtains the income rather than you directly, it is still your personal services income.

Personal super contributions deduction

If you meet certain eligibility criteria, you can claim personal super contributions as a deduction on your tax return (see Claiming deductions for personal super contributions).

Personal transfer balance cap

The maximum amount of capital an individual can transfer into their superannuation retirement phase, indexed proportionally to the general transfer balance cap.

Petty cash

Money used for small irregular cash expenditure e.g. stamps, milk, small amounts of petrol, used in your business.

Post-June 1983 component

The part of your eligible service period that occurred after 30 June 1983. Most benefits will have this component. The component is made up of a taxed element or an untaxed element or a combination of both:

• Taxed element – occurs if the super fund has paid tax on contributions. An employer employment termination payment (ETP) cannot have a taxed element after June 1983.
• Untaxed element – will generally be paid from a super fund that does not pay tax on contributions or an employer.

The tax treatment of this component depends on your age, whether the amount is below your low-rate threshold and whether it is a taxed or untaxed element.

Post-June 1994 invalidity component

The part of an invalidity payment made on or after 1 July 1994. This component represents a payment for the time between the date employment stopped, due to injury or permanent disability and the date of normal retirement.

Practical compliance guideline (PCG)

Guidelines which address the practical implications of tax laws and outline our administrative approach.

Practitioner lodgment service (PLS)

Our main electronic lodgment channel that allows tax practitioners to lodge clients' forms electronically.

Pre-July 1983 component

A benefit may have a pre-July 1983 component if your eligible service period started before 1 July 1983. It is calculated using a formula that determines the amount of the benefit that applies to the period of service before 1 July 1983. 5% of this component was taxed at marginal tax rates.

Preservation age

The minimum age a super fund member may be able access their preserved benefits. A benefit may be paid earlier if you have met a condition of release. The preservation age varies depending on when you were born:

Date of birth

Before 1 July 1960 

1 July 1960 – 30 June 1961

1 July 1961 – 30 June 1962

1 July 1962 – 30 June 1963

1 July 1963 – 30 June 1964

After 30 June 1964

Preservation age

55

56

57

58

59

60

Preserved benefits

Generally, preserved benefits must be kept in a super fund, ADF or RSA until the member has met a condition of release under the Superannuation Industry (Supervision) Act 1993.

Preserved benefits are commonly paid upon reaching preservation age and retiring. A member attaining preservation age can access their preserved benefits while still working. You are restricted to taking a non-commutable pension or annuity or non-commutable allocated pension or annuity.

If you have not reached preservation age but have permanently retired, a benefit can only be paid as a result of permanent incapacity, severe financial hardship, compassionate reasons or death.

Privacy Act

An Act of Parliament which among other things protects tax file numbers against misuse.

Processed date for Income Tax Refund

A processed date is the date a transaction is processed in our systems. This will not necessarily be the same date as the effective date.

Proportional indexation

Proportional indexation refers to the increase to your transfer balance cap for a financial year if the general transfer balance cap is increased as a result of indexation and you have not used all your available cap space.

Proof of identity

A significant document like a passport or birth certificate which proves you are who you say you are.

Public benevolent institution (PBI)

An institution organised for the relief of poverty, sickness, suffering, distress, misfortune, disability or helplessness. The characteristics of a PBI are:

• it is set up to provide benevolent relief to people in need
• it provides services or funding to relieve those needs
• it is carried on for the public benefit
• it is non-profit
• it is an institution
• its dominant purpose must be benevolent relief.

Public entity

A publicly traded company or unit trust, a mutual insurance company, a mutual affiliate company or a company in which all the shares are beneficially owned by one or more of those entities.

Purchased pension

A pension purchased from a super fund with the balance a member's account or an employment termination payment. For example, the purchased price of an allocated pension or market-linked pension is the account balance at the start of the pension.

Qualifying portion

The indexed capital amounts of benefits previously received, that are used to determine whether the current benefit is to be assessed against the lump sum RBL or pension RBL.

Quality assurance (QA)

Trustees have a duty of care to members. Super funds need to have procedures in place that ensure members' contributions are properly recorded, entitlements are protected and benefits are paid correctly.

Quick code (QC)

The unique identifiers at the bottom of each ato.gov.au web page. If you know the quick code, you can search using 'QC' and the number to access specific pieces of content.

Quota (commodity quota)

Quotas can be applied to a particular good or commodity to limit the quantity of goods a client can enter into home consumption at a particular rate of duty during a declared period.

Reasonable Benefit Limit (RBL)

RBL was the maximum amount of retirement and termination of employment benefits that a person could receive over their lifetime at concessional (reduced) tax rates. RBLs ceased from 30 June 2007.

Rebatable pension/annuity

A super pension or annuity where the recipient may be entitled to claim the pension tax offset. Your super fund can advise if your pension is rebatable. For a pension or annuity to be rebatable, the super fund must be a taxed fund. The fund must have paid the 15% contribution tax on contributions and earnings after June 1983.

Rebate income

Taxable income plus certain other income and losses declared by you. Your rebate income and the rebate income of your spouse (if you have one) are used to work out your eligibility for and amount of the senior and pensioner tax offset.

Before the 2009–10 income year, taxable income was used as the income test for senior Australians and pensioner tax offset.

For more information, refer to Income tests.

Receipt

A document that confirms that you have made a payment.

Receiving spouse

The spouse of the applicant is the receiving spouse (the person who will receive the transferred, rolled over or allotted benefits) if the super fund's trustee or retirement savings account provider accepts the contributions splitting application.

Record keeping

Taxpayers are required to keep records to support their claims in their income tax returns. These records may include receipts, invoices and bank statements.

Records

Records must be kept in English (or in a form that can be translated into English) for 5 years after they are prepared, obtained or the transactions completed.

Refund

An amount we pay to a taxpayer when the taxpayer has paid more tax than needed (often confused with a tax offset).

Refreshed period of review

For indirect tax laws, an amended assessment creates a refreshed period of review for 4 years from the day after notice of the amended assessment is provided or is taken to have been provided. The refreshed period of review only applies to the information amended and is subject to restrictions.

Relationship Authorisation Manager (RAM)

An authorisation service that allows you to act on behalf of a business online.

Registered organisation

An association registered under a law of a State or Territory as a trade union, or a society registered under a law of a State or Territory providing for a registration of friendly or benefit societies, or an association of employees that is an organisation within the meaning of the Industrial Relations Act 1988.

This type of entity was repealed from RBL definitions effective 1 July 2000. They are no longer able to pay ETPs.

Registrable superannuation entity (RSE)

A regulated super fund or an approved deposit fund or a pooled super trust, but does not include a self-managed super fund.

Reimbursements

Reimbursements are generally amounts received by an employee from their employer for actual expenses incurred. This does not include reimbursements of car expenses calculated on a cents per kilometre basis, which remain assessable income of the employee.

Relationship breakdown

Occurs when a person who has been living with another person (of the same or opposite sex) in a relationship as a couple on a genuine domestic basis stops doing so.

Release

To set free from an obligation. For super, it can refer to when you are able to access your super benefits (when you have met a condition of release).

Release authority

A release authority is a document we give to a super fund to authorise release of a member's superannuation.

When the fund receives a valid release authority, it is authorised to release an amount from the member’s super account according to the instructions outlined in the release authority.

There are several types of release authorities, including:

• excess concessional contributions
• excess non-concessional contributions
• Division 293 tax – Due and payable
• first home super saver scheme.

Release authority statement

The release authority will include a 'release authority statement' and instructions for completing it. This is the information a superfund must provide to us to confirm that they have released the member's or your money in accordance with the release authority.

Relevant business

A business entity that is your affiliate or connected with you.

Relevant financial year

For super, the relevant financial year is the financial year in which the splittable contributions were made. Therefore, the relevant financial year for a contributions splitting application means either the:

• last financial year that ended before the application
• the financial year in which the contributions splitting application is made, if the entire benefit is to be rolled over or transferred in that financial year.

Remission

An authority to waive a duty liability on dutiable goods (either excisable or customable). This usually occurs because the goods have been destroyed or no longer exist. After approval of the remission the goods are written out of the client's bond store register.

Rental expenses

You can claim a deduction for some of the expenses you incur for the period your property is rented or is available for rent. However you cannot claim expenses of a capital or a private nature.

Rental income

Rental and other related income is the full amount of rent and associated payments that you receive, or become entitled to, when you rent out your property. You must include the full amount you earn (gross rent) in your tax return.

Reportable fringe benefits amounts

The amount reported on the employee's payment summary will not be included in an employee's taxable or assessable income. However, the reportable fringe benefits amount will be used to work out an employee's:

• eligibility to claim superannuation rebates and deductions
• liability for the superannuation surcharge, termination payments surcharge and Medicare levy surcharge
• entitlements to certain income-tested government benefits
• child support obligations
• Higher Education Contributions Scheme (HECS) repayments.

Residual capital value

The capital amount remaining at the end of the term of a pension or annuity. This amount is generally specified in the super fund deed or contract when the benefit started.

Responsibilities of each taxpayer

Even if someone else (a family member, friend or tax agent) helps you prepare your tax return, you are still legally responsible for the accuracy of the information.

Restricted non-preserved benefits

Super benefits which can be paid on termination of employment. They can also be paid under the same conditions that preserved benefits are paid.

Retail fuel

Taxable fuel, within the meaning of the Fuel Tax Act 2006, that is sold by retail. Generally, this includes fuel on which duty is payable under customs and excise law and also includes compressed natural gas, liquefied petroleum gas, or liquefied natural gas.

Retaining refunds

We may retain your refund in order to verify it.

If your refund is retained, we will notify you by the RBA interest day or within 30 days of lodgment of the return.

The decision to retain your refund is a reviewable decision that you can object to under Part IVC of the TAA.

Retirement

Retirement is a condition of release for accessing your super when you reach your preservation age. You must have ceased gainful employment when you were 60 years old or over, or ceased gainful employment before you turned 60 years old, and the fund trustee must be satisfied you have no intention of becoming employed again in the future.

Retirement phase

The period during which a superannuation income stream is currently payable, or, if it is a deferred superannuation income stream, when a person has met a relevant nil condition of release. An earnings tax exemption applies to a superannuation income stream in the retirement phase. A transition-to-retirement income stream (TRIS) will only count towards your transfer balance cap when it is in the retirement phase.

A superannuation income stream will not be in the retirement phase in an income year if a superannuation income stream provider has failed to comply with a commutation authority in respect of a member’s transfer balance cap.

Retirement phase recipient

A retirement phase recipient is someone who is receiving a retirement phase superannuation income stream benefit. Someone who will receive a retirement phase superannuation income stream benefit from a deferred superannuation income stream is also a retirement phase recipient.

Retirement phase report

This is a new approved form, a new report is required from superannuation providers to report income streams paid when their member is in retirement phase.

Retirement phase superannuation income stream benefit

Each individual payment an individual receives under a superannuation income stream that is in the retirement phase.

Also includes a future payment from a deferred superannuation income stream that is in the retirement phase.

Retirement phase value

This is the value of the retirement interest that would become payable if the individual voluntarily caused the interest to cease at 30 June of the relevant financial year.

Retirement savings accounts (RSA)

An account that provides a low cost and low risk savings strategy for retirement. It is offered by banks, building societies, credit unions, life insurance companies and prescribed financial institutions (RSA providers). An RSA provider is not a super fund.

Revenue asset

A CGT asset where the profit or loss on disposal or sale is included in your assessable income or tax loss but isn’t a capital gain or loss. The asset is not trading stock or a depreciating asset.

Reversionary beneficiary

The person nominated by a super fund member to automatically receive an income stream (pension/annuity) on the death of the member.

Reversionary income stream

A superannuation income stream that automatically reverts to a nominated beneficiary on the death of its current recipient.

Reversionary pension/annuity

An income stream which has reverted to a nominated beneficiary, usually a spouse, on the death of the member.

Role

An obligation or entitlement recorded in our processing systems. A role can be financial (monetary or non-financial) such as a reporting obligation. You may have multiple roles recorded in your account. For example, your income tax account includes a main income tax role under which your annual assessments are recorded. Some other roles taxpayers may have in their income tax account are the general interest charge role, the trust role and the income tax 'former account' role. The 'former account' role records the balance of transactions processed before 1 July 2000 and details of transactions that could not be assigned to a financial year.

Rollover super benefit

Generally, this is a payment of your super benefits from one complying super fund to another complying super fund of your choice. However, other transfers between funds may also be known as rollover super benefits.

A payment can only be a rollover super benefit if it first qualifies as both a super lump sum and super member benefit.

Certain payments are specifically excluded from the definition of rollover super benefits, including benefits from the commutation of a super income stream paid to you because of the death of a person who is not your spouse.

RSA

See Retirement savings account.

RSA provider

Providers of a retirement savings account (RSA), these can be banks, building societies, credit unions or life insurance companies.

Salary sacrifice contributions

When you arrange for your employer to pay all or part of your before-tax salary into your super account for you. These contributions are treated as employer contributions and count toward your concessional contributions cap.

From 1 January 2020, salary sacrifice contributions will not:

• reduce the ordinary time earnings based on which your employer calculates your super entitlement
• count towards the amount of super guarantee contributions that your employer is required to make for them to avoid the super guarantee charge.

Salary sacrifice contributions are reportable employer super contributions.

Section 20C notice

A notice we send to super funds when there are reasonable grounds to believe a former temporary resident hasn’t claimed their super from the fund.

Self-assessment

The assessment system for indirect taxes allows the majority of taxpayers to self-assess their tax-related liabilities and tax-related entitlements through the lodgment of the relevant return for a tax period.

On lodgment, we are treated as having made an assessment for the reported tax period and the return is deemed to be a notice of assessment for that tax period. The assessment is worked out in accordance with the information set out in the return.

For income tax, we issue a notice of assessment based on the information provided in your income tax return. You have an obligation under the law to make sure you have shown all your income and only claimed legal deductions and tax offsets.

Self-managed superannuation funds (SMSFs)

A complying super fund which meets all of the following conditions:

• The number of members is no more than 4 (before 1 July 2021) or no more than 6 (on or after 1 July 2021).
• Each individual trustee of the fund is a fund member (see note).
• Each member of the fund is a trustee.
• No member of the fund is an employee of another member of the fund, unless those members are related.
• If the trustee of the fund is a body corporate, each director of the body corporate is a member of the fund.

There are additional conditions for single member SMSFs and funds in which a member is unable to act as trustee because of death or disability.

Note: Some state and territory laws restrict the number of trustees a trust can have to less than 6. As an SMSF is a type of trust, it is important that clients seek professional advice to help understand if their SMSF is impacted by these restrictions. Alternatively, they could restructure/structure their SMSF to have a corporate trustee, where each member is a director of that corporate trustee.

Seminars

We run free seminars for small business operators. They provide a general overview of the various taxes which may affect their business.

Separate net income (SNI)

Separate net income (SNI) is all the income your dependant received while you maintained them. Before the 2009–10 income year, SNI was used as the income test for tax offsets relating to dependants. From the 2009–10 income year, adjusted taxable income (ATI) is used for this purpose.

Serious hardship

When a person is having difficulty in meeting their basic living costs.

Service providers (intermediaries)

A term used to collectively describe entities that assist super funds and employers in processing super transactions (e.g. payroll software providers, outsourced payroll providers, clearing houses, message handlers and super fund administrators).

Set-on

An additional payment made by the client to cover an underpayment relating to the previous excise liability period.

Set-off

The payment of a refund made by reducing a payment relating to a future excise liability.

Settlement

The process of lodging a liability statement and making a payment for excise duty.

Settlement period

The nominated time period (currently weekly) allowed for clients with a settlement permission to enter goods for home consumption prior to lodging a liability statement and making the corresponding payment of excise duty.

Settlement permission

An approval granted to clients to deliver product into home consumption throughout a nominated time period (settlement period) and pay excise duty the first working day after the end of that settlement period.

Share

A right of ownership in a company.

Shareholder

Someone who owns shares.

Shortfall exemption certificate

If you have more than one employer you can apply for a shortfall exemption certificate from us if your employer contributions will cause you to exceed the concessional contributions cap.

The certificate means one or more of your employers will not need to pay super guarantee (SG) contributions for you for up to 4 quarters in one financial year. You still need to receive SG contributions from at least one employer for each quarter.

Simplified tax system (STS)

An alternative method of determining taxable income for eligible small businesses with straightforward financial affairs. It began on 1 July 2001. From the 2007–08 income year, the STS ceased to exist. It was replaced with the small business entity provisions. The concessions previously contained in the STS are still available to businesses that meet the small business entity test.

Small business entity

An entity that operates a business with an aggregated turnover of less than $10 million.

Small business superannuation clearing house

The superannuation clearing house is a free online super payments service that can be used by employers with 19 or fewer employees or have an annual aggregated turnover of $10 million or less, to pay super contributions in one transaction to a single location.

Small employer

An employer with 19 or fewer employees.

Small lost-member account

A super account that is both of the following:

• a lost member account with a balance less than $200
• not a defined benefit fund.

In most cases, funds must report and pay these accounts to us as unclaimed super.

You can generally have the benefit paid out to you tax-free or transfer it to another super account you hold.

See Superannuation and unclaimed super.

SMSF auditor

A person must be registered as an approved SMSF auditor with the Australian Securities and Investment Commission (ASIC) before they can audit a self-managed super fund (SMSF).

SMSF messaging provider

Entities that simplify how SMSFs can receive employer contribution messages arriving via a secure electronic distribution network (in line with SuperStream obligations).

Sole trader

A person wholly owns and who operates a business.

Source documents

The original documents that record your business transactions.

Special value (SV)

The modified value of a capped defined benefit income stream.

For a lifetime pension or lifetime annuity the special value equals the annual entitlement multiplied by 16.

For life expectancy and market linked products, the special value equals the annual entitlement multiplied by the remaining term.

Special circumstances – exceeding contributions caps

If your contributions for a financial year exceed or will exceed your contributions cap due to special circumstances, you can apply to the Commissioner to make a determination so that some or all your contributions are disregarded or allocated to another year.

To be considered special circumstances these conditions must be met:

• There is something out of the ordinary in your case.
• The circumstances have resulted in unfair, unintended or unjust outcomes.
• The contributions were made gradually over the course of your life.

Splitting applicant

A member of a super fund or retirement savings account (RSA) holder who makes a contributions splitting application to their fund's trustee or RSA provider to split their splittable contributions into their spouse's super account.

Spouse splittable contribution

A contribution to a regulated super fund on or after 1 January 2006, or an allocated surplus contribution amount that is allocated on or after 1 January 2006.

Spouse

Your spouse includes another person (of any sex) who:

• you were in a relationship with that that was registered under a prescribed state or territory law
• although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.

Spouse contributions

Contributions you make to a super fund or retirement savings account holder on behalf of your spouse. You may be entitled to a tax offset if you make these contributions. Spouse contributions count as non-concessional contributions for the receiving spouse.

Standard business reporting (SBR)

SBR is designed to be a standard approach to online or digital record-keeping and to simplify reporting to government. It allows tax professionals and businesses with an ABN to prepare and submit reports directly from their business software – this means they don’t have to log into different systems.

Statement of account (SOA)

A statement of account (SOA):

• provides a list of payments and transactions processed on your account during the statement period
• shows the current account balance and any amounts that are overdue.

The SOA is also used to deliver a cheque, payment slip or advice of EFT payment made by us.

Statement of release authority

After a superannuation provider has released an amount in accordance with a release authority or a transitional release authority, the entity must report details of the payment of the amount to us and the individual within 30 days of making the payment.

Statutory income

Income that is not ordinary income and that you include in assessable income because of a specific rule in the tax law. For example, a net capital gain is statutory income. If a receipt is classed as both ordinary income and statutory income, the statutory rule prevails.

Stock

Items which a business produces, manufactures, acquires or purchases for manufacture, sale or exchange.

Stocktake

The process of working out the value of stock currently on hand. A stocktake is often used to help calculate taxable income.

Stop time

The stop time is the time at which an income stream of which you were a retirement phase recipient stops being a retirement phase superannuation income stream.

Structured settlement (personal injury payments)

Personal injury payments a member contributes towards an accumulation or retirement phase super interest.

A debit arises in your transfer balance account when a structured settlement contribution is made or when you start to have a transfer balance account (whichever is later).

For this debit to arise, the contribution must be made to the fund within 90 days of being received or the structured settlement order coming into effect (whichever is later).

You must notify the super provider using the approved form before or when making the contribution.

See structured settlement for more information.

Student financial supplement scheme (SFSS)

A voluntary loan scheme that was to help tertiary students cover their expenses while they studied. Although this scheme closed on 31 December 2003, we continue to administer repayments.

Student start-up Loan (SSL)

A voluntary loan available to eligible students in higher education who receive Youth Allowance, Austudy or ABSTUDY Living Allowance. We administer repayment of the loan.

Study and training support loans

The government provides financial assistance (in the form of loans) to people undertaking higher education, trade apprenticeships and other training programs. We administer repayment of the loan.

Substantiate a claim

Producing records such as receipts to support your claim.

Super co-contribution

A government measure to increase super savings. If you are eligible and make personal (after-tax) contributions to your super, the super co-contribution is paid into your super account (see Super co-contribution).

Super fund

We use this term to refer to a:

• complying super fund
• public sector super scheme (regulated or exempt public sector super scheme)
• complying approved deposit fund
• retirement savings account.

Super guarantee charge (SGC)

A charge imposed under the Superannuation Guarantee Charge Act 1992 on employers who do not make the minimum super guarantee contributions required on behalf of their eligible employees.

Super guarantee contributions (SG)

The amount of super an employer must contribute on behalf of their eligible employees. The rate is currently equal to 9.5% of an employee's ordinary time earnings and will be gradually increased to 12% from 1 July 2025.

Super Income Stream

An income stream supported by superannuation savings that provides for retirement.

Most people have a choice of taking their super as an income stream or as a lump sum.

Super TFN integrity check service (SuperTICK)

An online service that improves the integrity of data used by super funds when meeting their super obligations (such as processing rollover requests).

SuperTICK allows a fund to check a member’s details, including their tax file number, against ATO records.

Superannuation

A system where money is placed in a fund to provide for a person's retirement. Often shortened to 'super'.

Superannuation administration stakeholders group (SASG)

The group brings together the ATO and representatives of the super industry to identify, discuss and jointly resolve significant administrative issues affecting the operation of the superannuation system.

Superannuation clearing house

An external service provider that arranges the sending of super data and payments to funds on behalf of an employer.

Superannuation holding accounts (SHA) special account

Before 30 June 2006, employers used the SHA special account to deposit super guarantee contributions for their employees.

The SHA special account (previously known as the 'superannuation holdings accounts reserve') is administered by the ATO.

Superannuation income stream

A superannuation income stream in the retirement phase. Generally a right to receive a periodic payment from superannuation interest, for example, a pension or annuity.

Superannuation income stream benefit

Each payment an individual receives under a superannuation income stream.

Superannuation income stream provider

A trustee of a super fund, an RSA provider, a trustee of an approved deposit fund or a life insurance company.

Superannuation Industry (Supervision) Act 1993

This legislation provides prudential standards for super funds. The legislation is administered by 3 regulators: us, Australian Securities and Investments Commission (ASIC), and Australian Prudential Regulation Authority (APRA). We are solely responsible for the administration of self-managed super funds (SMSFs).

Superannuation interest

An interest in a super fund, an interest in an approved deposit fund, an RSA or an interest in a superannuation annuity.

Superannuation intermediary

An intermediary is authorised by the provider to give the statement on behalf of the provider being reported for.

An intermediary may be:

• a super administrator
• a tax agent
• an accountant
• an employee of the provider
• any other properly authorised legal entity.

It may also be the provider itself lodging on its own behalf.

Superannuation pension or annuity tax offset

If you are receiving a rebatable pension or annuity, you may be eligible to claim all or part of the pension tax offset.

Superannuation provider

The provider is the particular super fund, ADF, RSA or life insurance company that holds the account for the member, rather than the trustee or RSA provider with the obligation to report.

A super fund includes all public sector super schemes, regardless of whether they are administered by the Australian Prudential Regulation Authority (APRA), and regardless of whether they are constitutionally protected.

Superannuation services

Commonly referred to as EmployerTICK and SuperTICK, previously referred to as enabling services. These ATO services enable employers and funds to check the details of an employee or member before they send a contribution or process a rollover request.

Superannuation surcharge

A surcharge (tax) of up to 15% was imposed on certain super contributions, specified rollover amounts, and termination payments which were made before 1 July 2005.

SuperMatch

A service that enables APRA-regulated funds to consolidate member accounts.

SuperStream

SuperStream is the way businesses must pay employee superannuation guarantee contributions to super funds. With SuperStream, money and data are sent electronically in a standard format.

SuperStream benchmarking report (SRF711.0)

The report is developed from data collected by APRA that contains ATO analysis and interpretation of SuperStream benchmarking data which is used to measure SuperStream’s success.

SuperStream Readiness and Implementation (SSRI)

A project where we work with industry and other stakeholders to test and prepare for SuperStream implementations.

Supplement loan scheme

Loan provided to tertiary students who are eligible for either Austudy or ABSTUDY.

Supplies

Supplies include the goods and services sold in your enterprise. They also include many other transactions such as when you provide advice or information, lease out commercial premises or provide hire equipment. Not all supplies are taxable supplies.

SV just after commutation

SV just after commutation is the special value, worked out just after the superannuation lump sum is paid, of the superannuation interest that supports the capped defined benefit income stream.

SV just after event

SV just after event is the special value, worked out just after the loss or payment reduces the value of the superannuation interest that supports the capped defined benefit income stream.

SV just before commutation

SV just before commutation is the special value, worked out just before the superannuation lump sum is paid, of the superannuation interest that supports the capped defined benefit income stream.

SV just before event

SV just before event is the special value, worked out just before the loss or payment reduces the value of the superannuation interest that supports the capped defined benefit income stream.

Tariff

Generally refers to either the Excise tariff or Customs tariff. Tariff may also be referred to in terms of a tax, duty, excise, levy or toll.

Tariff item

Numeric or alpha codes listed in the schedule to the Excise Tariff Act. Each code refers to a specific type of goods or a specific end use circumstance and specifies the rate of excise duty applicable to those goods at that circumstance.

Tariff rate

The rate of duty that applies to the tariff item. It is used to determine the liability at a particular point in time.

Tax agent

A tax agent is a person, partnership or company registered with the Tax Practitioners Board (TPB) and provides tax agent services for a fee.

Tax avoidance

Tax avoidance schemes involve the deliberate exploitation of the tax system.

Tax evasion

Understatement of income or overstatement of deductions (or both).

Tax file number (TFN)

A unique number we issue to individuals and organisations to increase the efficiency in administering tax and other Australian Government systems such as income support payments.

Tax file number declaration

This form helps an employer work out how much tax to withhold from payments made to employees. It replaces the Employment Declaration.

Tax-free portion of transfers from foreign superannuation funds

If you have overseas super paid directly to an Australian complying super fund, you can choose to have the taxable part of the payment treated as assessable income of your Australian super fund. The amount transferred will count towards either your concessional or non-concessional contributions cap depending on how it is treated.

Tax-free threshold

If the employee is an Australian resident for taxation purposes, $18,200 of their yearly income is not taxed. This is called the tax-free threshold. If they are certain their total income from all sources will be more than the tax-free threshold they can only claim the tax-free threshold from one payer at a time. If they are certain that their total income from all sources for the year will be less than the tax-free threshold, they can claim the tax-free threshold from all of their payers. Foreign residents cannot claim the tax-free threshold.

Tax invoice

A document generally issued by the supplier. It shows the price of a supply, states if it includes GST, and may show the amount of GST. It must show other information, including the ABN of the supplier. You must have a tax invoice before you can claim an input tax credit on your activity statement (except for small amounts).

Tax offset

An entitlement which reduces the amount of income tax to be paid.

Tax payable

The amount of income tax required to be paid.

Tax periods

Tax periods are for GST purposes and are the quarters in the calendar year. If your annual turnover exceeds $20 million your tax periods are each calendar month. If your annual turnover is less than this amount, you can choose to use monthly tax periods.

Note: 'tax period' is a defined term in GST law.

Tax relief board

Considers whether a person should be granted a release from their obligation to pay their income tax debt.

Tax return

A form containing a person's income tax details which taxpayers (or their legal representatives) must complete and lodge with us.

Taxed splittable contribution

A contribution that has been taxed in the member's super fund. It can be one of the following:

• employer contributions, including contributions resulting from the employee sacrificing salary into super
• personal contributions for which an income tax deduction is claimed
• super guarantee entitlements transferred to a taxpayer's super account
• allocated surplus contribution amounts. For example, an amount that is allocated on or after 1 January 2006 from a regulated super fund surplus by a trustee to meet an employer's liability to make contributions.

Taxable importations

Goods imported into Australia are taxable importations, unless the goods are duty free, or would have been GST-free or input-taxed if they had been supplied.

Note: 'Taxable importation' is a defined term in GST law.

Taxable income

Gross income minus business deductions.

Taxable supplies

The term is widely defined to include most supplies (goods, services and anything else) you make. A supply is not a taxable supply if it is GST-free or input taxed.

TaxPack

The guide containing the tax return forms and information on how to complete the tax return.

From the 2011–12 financial year, TaxPack has been replaced by the Individual tax return instructions.

Taxpayer

A person deriving income or deriving profits or gains of a capital nature.

Taxpayers' charter

Outlines taxpayers' rights and obligations and our obligations and service standards.

Temporary incapacity

Also referred to as temporary disability. This is when an individual has ceased to be gainfully employed due to ill-health (physical or mental) but the illness does not constitute a permanent incapacity.

Terminal Medical Condition (TMC)

A TMC exists if 2 registered medical practitioners have certified, jointly or separately, that the member suffers from an illness, or has incurred an injury, that is likely to result in the member's death within 24 months of the date of certification. At least one of the medical practitioners must be a specialist in an area related to the illness or injury suffered by the member.

Termination of employment

Can occur due to an employee retiring, voluntarily ceasing employment with an employer, an employer dismissing an employee or by mutual agreement.

Testamentary trust

A trust created by a will.

Time limits on credit entitlements

Time limits apply for claiming credits under GST and fuel tax laws. This means, you must claim the credit within a 4-year period.

This means, you must claim both the:

• GST credit within 4 years after the due date for lodging the activity statement to which the credit would first be attributable
• fuel tax credit within 4 years after the due date for lodging the fuel tax return to which the GST credit would first be attributable; or, if you are not registered or required to be registered, within 4 years after the acquisition, manufacture or importation occurred.

Total superannuation balance

Your total super balance (TSB) is a way to value your superannuation interests in all your super funds. It is calculated on a given date, usually 30 June.

Your TSB:

• may be different from your super fund account balance
• includes all your super interests.

Your TSB at 30 June of the previous financial year controls whether you can make any non-concessional contributions in the current financial year without having to pay extra tax.

TSB is relevant when working out eligibility for a range of other super measures.

See Total superannuation balance for more information.

Trade support loan (TSL)

Eligible Australian apprentices are offered loans of up to $20,000 over the life of an Australian Apprenticeship (4 years). Repayment of the loan is administered through the Australian Taxation Office.

Trading stock

Anything produced, manufactured, acquired or purchased for the purpose of manufacture, sale or exchange (including livestock).

Transfer balance

Your transfer balance is the balance of your transfer balance account. It is the sum of your transfer balance credits minus your transfer balance debits.

Transfer balance account

The transfer balance account is a method of tracking transactions and amounts in retirement phase. The balance of your transfer balance account determines whether you have exceeded your transfer balance cap at the end of any given day.

Your transfer balance account measures your transfer balance, which is the sum of credits less the sum of debits posted to the account.

Transfer balance account report (TBAR)

A Transfer balance account report (TBAR) is required to advise us when a transfer balance account event occurs or further information is required to calculate your member's total super balance or you need to cancel information that you have reported to us.

Transfer balance cap

The maximum amount of capital you can transfer to your superannuation retirement phase, indexed proportionally to the general transfer balance cap.

Your transfer balance cap for the financial year in which you first start to have a transfer balance account is equal to the general transfer balance cap for that financial year.

Your transfer balance cap for a later financial year is equal to your unused cap percentage multiplied by the indexation increase.

Transfer balance cap event

If you are a super provider you are required to report super income streams in existence just before 1 July 2017 and any of the following events that occur on or after 1 July 2017:

• super income streams that have commenced in retirement phase
• limited recourse borrowing arrangement payments
• member commutations
• compliance with a commutation authority issued by the Commissioner
• personal injury (structured settlement) contributions
• super income streams that stop being in the retirement phase, for example, because the trustee failed to meet the minimum pension payment standards for an income stream.

Transfer balance credits

Transfer balance credits increase your transfer balance and reduce your available cap space. A transfer balance credit arises in your transfer balance account if:

• you become a retirement phase recipient of a superannuation income stream, including super death benefit income streams, deferred super income streams and reversionary income streams you become entitled to
• you have repayments from a limited recourse borrowing arrangement
• you have notional earnings that have accrued on excess transfer balance amounts.

Transfer balance debits

Transfer balance debits decrease your transfer balance and may increase your available cap space. A debit arises in your transfer balance account if:

• you receive a superannuation lump sum because you commute a superannuation income stream of which you are a retirement phase recipient
• a structured settlement you receive and contribute towards your superannuation interest within a certain timeframe
• your superannuation income stream stops being in retirement phase
• your superannuation is reduced due to fraud, bankruptcy or a payment split
• you have non-commutable excess transfer balance
• you fail to comply with pension standards.

Transfer balance event notification

An individual uses this to advise us when a transfer balance debit event occurs and allows us to adjust your transfer balance account and correctly apply the transfer balance cap provisions.

Transition to retirement income stream (TRIS)

Effective 1 July 2017, the government removed the tax-exempt status of earnings from assets that support a TRIS that is not in the retirement phase. Earnings from assets supporting a non-retirement phase TRIS will be taxed at 15% regardless of the date the TRIS commenced. Members will also no longer be able to treat super income stream payments as lump sums for taxation purposes. Where a member has reached age 65 or has met another nil cashing restriction condition of release and notified the fund, the TRIS will move into retirement phase and the fund will receive the earnings tax exemption.

Trust

A trust exists when a person (a trustee) holds property as its nominal owner for the good of one or more beneficiaries.

Turnover

The amount of money that passes through a business entity in a financial year.

Unclaimed super

There are 5 types of unclaimed super. Unclaimed super for a:

• member 65 years old or older
• non-member spouse
• deceased member
• former temporary resident
• member with a small or insoluble lost-member account.

Depending on the type of fund, funds must report and pay unclaimed super to us or to the relevant state or territory authority. Unclaimed super should not remain in the fund.

See Superannuation and unclaimed super. 

Unclaimed super money statement (USMS)

The statement is used to report unclaimed super money, including former temporary resident unclaimed super money and also lost members and inactive low-balance accounts.

Undeducted contributions

Also called non-concessional contributions, are contributions paid into a super fund by the member (or by a person other than an employer of the member) where no deduction has been allowed for the contributions – after-tax income which the individual doesn’t claim a personal super contributions deduction.

Undeducted purchase price

The amount contributed towards the purchase of a pension or annuity that was not eligible for a tax deduction – for example, undeducted contributions.

Unfunded defined benefit fund

A super fund where your member benefits are not financed until just before they become payable to you. At this time, the benefits are generally sourced from your employer. These funds mostly apply to government employees.

Uniform capital allowance system

A set of general rules for calculating deductions for the decline in value of most depreciating assets and for certain capital expenditure. The system applies from July 2001.

Unique superannuation identifier (USI)

Identifies a super product within an APRA-regulated fund. The USI may be the APRA-regulated fund’s ABN with 3 additional digits, or the fund’s current super product identification number (SPIN).

SMSFs don't have a USI – the ABN acts as the fund identifier.

Unrestricted non-preserved benefits

Generally, benefits which a member has previously met a condition of release for and was entitled to be paid but they have voluntarily decided to keep the benefits within the super system. There are no restrictions for paying these super benefits out to a member at any time on demand (regardless of their age, employment situation or financial position) providing the super fund rules allow the payment.

Untaxed splittable contribution

An undeducted contribution made by a super fund member, or by another person, to a regulated super fund where that contribution is not a taxable contribution under income tax legislation.

Non-concessional (undeducted) contributions made after 5 April 2007 cannot be split with a spouse.

Unused cap percentage

Your unused cap percentage is worked out by finding the day on which your transfer balance was at its highest in the previous financial year, comparing that balance with your personal transfer balance cap on that day, and expressing the unused cap amount as a percentage. Note that your unused cap percentage cannot be greater than 100%.

Voluntary agreement

A written agreement between a business (the payer) and a worker (the payee) to bring work payments into the PAYG withholding system.

Voluntary release authority (VRA)

The voluntary release authority (VRA) for excess concessional contributions applies to 2012–13 and earlier financial years.

We send you a VRA with an excess concessional contributions tax assessment. You may use the VRA to withdraw excess contributions from one or more super funds.

You can use the VRA or you can pay your excess concessional contributions tax from your own pocket.

A VRA for excess concessional contributions tax must be given to your super fund within 90 days after the date of the VRA.

For 2013–14 and later financial years, any excess concessional contributions will be included in your assessable income.

Widely held entity

An entity where one of the following applies:

• No other entity has a total small business participation interest of 20% or more.
• There are not less than 5 other entities whose total small business participation interests in the entity is 50% or more.
• Investment in the entity is actively marketed with the intention to meet the conditions above.
• The entity's activities and investments relate to winding down.

Work test

To meet the work test you must be gainfully employed for at least 40 hours in any consecutive 30-day period in the income year in which the contributions are made.

For contributions made after 1 July 2022 the work test applies to you if you are aged 67 to 75 years and you want to claim personal superannuation contributions deductions. If you are aged 75 and meet the work test, you can only claim a deduction for a contribution that is made on or before the day that is 28 days after the end of the month in which you turn 75.

You are no longer required to meet the work test for contributions that are non-concessional contributions or salary sacrificed contributions.

Prior to 1 July 2022, the work test applied as a condition on a super fund accepting contributions rather than as a condition on an individual claiming a deduction for the contribution. For contributions made after 1 July 2022 the work test no longer applies to individuals up to 75 years old (except if claiming a personal super contribution deduction).

For 2020–21 this rule applied once you turned 67 years old and until you turned 75 years old. For earlier financial years this rule applied once you turned 65 and until you turned 75 years old.

Work test exemption

From 1 July 2022, if you no longer meet the work test in the year in which a contribution is made, you can still claim a deduction for the contribution if

• you satisfied the work test in the previous income year
• your TSB is less than $300,000 at the end of the previous income year
• you have not already relied on the one-off rule in respect of any contribution
• you have not made a contribution that was accepted under a prescribed provision of the SIS Regulations or RSA Regulations.

If you are in a defined benefit fund you can't use the exemption unless you choose to open an accumulation account with another super fund.

See Work test exemption for more information.

Working holiday maker (WHM)

People who come to Australia on a subclass 417 visa (working holiday) or a subclass 462 visa (work and holiday).

Wine equalisation tax (WET)

The WET is a value based tax levied on wine at a rate of 29% on the last wholesale sale (for example. sale to a reseller). If wine is not sold by wholesale, alternative values are used to calculate the tax. For the purposes of the WET, wine includes grape wine, grape wine products (such as marsala and vermouth), fruit or vegetable wine, cider, perry, mead and sake.

Withholding declaration

This document helps an employee calculate an entitlement to a family benefit or tax offset and to authorise their employer to reduce the amount of tax withheld from payments.

Withholding tax

If the recipient has not provided their tax file number, withholding tax is deducted at the source on:

• interest, dividend and royalty payments made to non-residents
• certain investments or payments to residents.

YTD

Year to date.