Things you need to know
Declare at this question lump sum payments you receive from your employer for unused annual leave or unused long service leave.
Don't include in your tax return payments for early retirement or genuine redundancy at 'Lump sum D' on your income statements or PAYG payment summary – individual non-business. You don't pay tax on these payments.
Don't include at this question, any:
- employer lump sum payments in arrears or non-superannuation annuity payments in arrears at 'Lump sum E' on your income statements or payment summaries – declare these amounts in the supplementary tax return at question 24 Other income 2025.
- lump sum payments in arrears on your PAYG payment summary – superannuation income stream – declare these amounts at question 7 Australian annuities and superannuation income streams 2025.
If you don't receive any of these lump sum payments from your employer, go to question 4 Employment termination payments 2025.
What you need to answer this question
You'll need your income statement or PAYG payment summary – individual non-business, PAYG payment summary – foreign employment or a similar statement from your payer showing an amount at 'Lump sum A' or 'Lump sum B' where relevant.
If you have an amount at 'Lump sum A' that foreign tax has been paid, you'll also need to complete the supplementary tax return question 20 – label U.
If you can't find or think there is an issue with your income statements, payment summaries or similar statements, contact your employer or payer. For more information, see Income statements.
Completing your tax return
To complete this question, follow the steps.
If you don't have amounts at 'Lump sum A' on your income statements or payment summaries, go to Step 4.
Amounts at Lump sum A
Follow the steps for amounts at lump sum A.
Step 1
Add up the total tax withheld from lump sum A amounts on your income statements and payment summaries. Don't include any amounts of tax withheld you include at any other question, such as question 1 or 2.
Write the total under Tax withheld at the left of question 3 – label R.
Step 2
Add up all lump sum A amounts on your income statements and payment summaries.
Write the total at question 3 – label R.
Step 3
Print in the Type box at label R:
- R – if the amount relates to one of the following
- a genuine redundancy payment
- an early retirement scheme payment
- the invalidity segment of an employment termination payment or superannuation benefit
- T – for all other situations.
Check with your payer if you're not sure.
If you don't have amounts at 'Lump sum B' on your income statements or payment summaries, you have finished this question. Go to question 4 Employment termination payments 2025.
Amounts at Lump sum B
Follow the steps for amounts at lump sum B.
Step 4
Add up the total tax withheld from lump sum B amounts on your income statements and payment summaries. Don't include amounts of tax withheld you include at step 1 or at any other question, such as question 1 or 2.
Write the total under Tax withheld at the left of question 3 – label H.
Step 5
Add up all lump sum B amounts on your income statements and payment summaries.
Divide the total by 20. This is because only 5% is taxable.
Write the answer at question 3 – label H.
Where to go next
- Go to question 4 Employment termination payments 2025.
- Return to main menu Individual tax return instructions 2025.
- Go back to question 2 Allowances, earnings, tips, directors fees etc 2025.