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  • Your payment summaries and tax return

    Your employer will give you one or more payment summaries showing the amounts you've been paid and the tax withheld. You use the information in these payment summaries to complete your annual income tax return.

    Find out what to do if you receive a:

    PAYG payment summary – individual non-business

    Label

    What this is

    What to do

    Lump sum A or B

    These lump sums are for unused annual leave and long service leave. They may be shown on your payment summary or on a letter or statement from your employer.

    See also: Tax table for unused leave payments on termination of employment

    These payments are not part of your ETP but may be concessionally taxed.

    Enter these amounts on your income tax return.

    Lump sum D

    If your termination was because of genuine redundancy or an early retirement scheme, your payments will include a tax-free component. This is shown at lump sum D.

    See also: Taxation of termination payments

    This tax-free component is not part of your ETP and is not assessable income.

    It should not be shown anywhere on your tax return.

    Lump sum E

    These payments relate to earlier income years and return-to-work payments.

    These are assessable payments and need to be declared on your tax return.

    PAYG payment summary – employment termination payment

    If your employer pays you an ETP, they must give you a PAYG payment summary – employment termination payment within 14 days. Your payment summary shows:

    • the taxable component of your ETP
    • the tax withheld
    • a code for the type of ETP.

    Enter each of these at question 4 on your tax return when you lodge it at the end of the income year.

    We use the code on your payment summary to work out which cap to apply and the correct rate of tax for your situation. ETPs are concessionally taxed up to the cap.

    If the code is O or P, your ETP is subject to the whole-of-income cap. This means if you earn more income after you leave work, you may pay more tax on your ETP when you lodge your tax return. See The whole-of-income cap and your tax.

    Your payment summary may also show a tax-free component. This is not assessable income.

    See also:

      Last modified: 31 May 2019QC 50513