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Edited version of private advice
Authorisation Number: 1051960689680
Date of advice: 14 March 2022
Ruling
Subject: Assessable income - receipts v earnings
Question
Is salary and wages income, earned in one financial year and received in the next, assessable in the year it is received?
Answer
Yes.
Taxation Ruling TR 98/1 Income Tax: determination of income; receipts versus earnings considers the appropriate method of determining when income is derived under section 6-5 of the Income Tax Assessment Act 1997 when income is earned in one tax year but received in another. Paragraph 42 of TR 98/1 states that salary, wages or other employment remuneration are assessable on a receipt's basis. This is irrespective of whether that income relates to a past or future income period.
On this basis, your June 20XX monthly payment is assessable in the 20XX financial year, being the financial year, the payment was received.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You were an employee of company W and renumerated on a monthly basis.
Your last monthly salary and wages payment for the 20XX financial year was deposited into your nominated bank account in early July 20XX, being the following financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5