Currently, if a back payment accrued more than 12 months ago and exceeds $1,200, you need to report this as Lump Sum E in your Single touch payroll (STP) reporting.
From 1 July, the $1,200 threshold will be removed. This is because the law around lump sum payments has changed.
It means that you should report all back payments which accrued more than 12 months ago as Lump Sum E in your STP reporting, regardless of the amount.
To work out how much to withhold on a back payment, you should continue to refer to the tax table for back payments, commissions, bonuses and similar payments. This tax table will be updated to reflect the change in June, 2025.
Find out further details on back payments and where to report this information.
Remember, a registered tax professional can help you with your tax and super obligations.