ITR - Income Notes - ATO

1- Salary or wages

1. Commissions, Bonuses, Income from part-time or Casual work, Parental leave pay, Dad-and-partner pay

2. Lost salary or wages paid under

• Income protection policy

• Sickness or accident insurance policy

• Workers’ compensation scheme.

2- Allowances, Earnings, Tips, Directors’ fees etc

1. All Employment allowances

2. Tips, gratuities, Consultation fees, Payments for voluntary and other services

3. All other payments from which tax was not withheld, such as 

• Commissions, bonuses

• Casual job income

• Insurance payments (Income protection, Sickness 

and Accident policies).

3- Employer lump sum payments

• Unused annual leave or

• Unused long service leave

4- Employment Termination Payments (ETP)

1. ETP Includes

• Death benefit ETPs

• Foreign ETPs

• Late termination payments 

2. ETP Does not Includes

• Foreign termination payments

• ETPs, you received as the trustee of a deceased estate

• Departing Australia superannuation payments

5- Australian Government allowances and payments

1. Job Seeker payment

2. Youth allowance

3. Australian study payment

4. Parenting payment (partnered)

5. Partner allowance

6. Special benefit

7. Widow allowance

8. Farm household allowance

9. An education payment of any of the following when you were 16 years old or older

• ABSTUDY living allowance

• Payment under ‘Veterans Children Education Scheme

• Payment under ‘MRCA Education Allowance’

10. Commonwealth education or Training payments 

11. Youth disability component of:

• Youth allowance

• ABSTUDY living allowance

12. Income support component from a Community Development Employment Project (CDEP)

13. CDEP scheme participant supplement

14. Disaster recovery allowance

15. Disaster income support allowance for special category visa (subclass 444) holders

16. But does not include any COVID-19 disaster payment

6- Australian Government pensions and allowances

1. Age pension

2. Bereavement allowance

3. Carer payment

4. Disability support pension, if you have reached age-pension age

5. Education entry payment

6. Parenting payment (single)

7. Age service pension

8. Income support supplement

9. Defense Force income support allowance (DFISA) 

10. DFISA-like payment from the Department of Veterans’ Affairs (DVA)

11. Veteran payment

12. Invalidity service pension, if you have reached age‑pension age

13. Partner service pension? Do not include any Australian Government pensions or allowances that are not taxable

7- Australian annuities and superannuation income streams

1. Australian annuities (also called non-superannuation annuities

2. Australian superannuation income streams are paid to you by 

• Australian superannuation funds

• Retirement savings account (RSA) providers

• Life insurance companies 

8. - Australian Superannuation Lump Sum Payments

1. Australian superannuation lump sum payments or superannuation death benefit payments are paid to you by

• Superannuation funds 

• Approved deposit funds 

• Retirement savings account providers 

• life insurance companies

2. Superannuation guarantee charge

3. Superannuation holding accounts special account 

4. Payment received from unclaimed money registers.

5. Super Annuation withdrawals are generally taxed at your marginal tax rate less at 30% Rebate 

9- Attributed personal services income

1. Includes

• Personal services income is a reward for your personal efforts or skills generally paid to your personal services entity (a company, partnership or trust)

• If your personal services income is paid to a personal services entity, the income less certain deductions relating to gaining or producing that income will be deducted.

• This income was promptly paid to you by the entity as salary.

2. Does not Includes

• Received personal services income as a sole trader (D-14 PSI)

10- Gross interest

1. Bank Interest (Interest from savings accounts, Term deposits and Cash Management Accounts)

2. ATO Interest

3. Interest from children’s accounts used as if they were yours

4. Tax file number (TFN) amounts, (This the amounts withheld by financial institutions because you did not provide your TFN or Australian business number (ABN) to them.)

5. Interest from other sources

6. Interest from a foreign source

11- Dividend

Refer page No 14

Dividends and distributions from Australian companies

1. Dividends applied under a dividend reinvestment plan (DRP)

2. Bonus shares that qualify as dividends

3. Distributions by a corporate limited partnership

4. Dividends paid by a corporate unit trust

5. Dividends paid by a public trading trust

6. Dividends paid by a listed investment company.

Dividend = Unfranked Dividend + Franked Dividend + Franking Credit

12- Employee share schemes (Like ESOP Benefit)

1. Employee share schemes Interest (ESS interest) It’s a Scheme to encourage employees to acquire share or Ownership in the company.

2. ESS gives employees the ability to purchase shares at discounted price and giving employees options to buy shares in the future.

3. 12 🡺 Discounts received on ESS = Market Value of ESS acquire - Amount paid to acquire ESS

13- Income from partnerships and trusts

1. Income or a loss from a partnership

2. Income from a Trust

3. Amounts of tax paid, Amounts withheld from, partnership or trust income.

4. Share of the 'national rental affordability scheme' tax offset

(You can get Distribution of Trust income from Annual Tax Statement or From Prefill)

To Download Annual Tax Statement 

1. Go to 🡺 https://www.delisted.com.au/

2. Search Trust 🡺 Using Trust Code or by Trust Name

3. Select the Trust Name from the List

4. Now you can get the Link of Registry Website

5. Use your HIN Number & Postal Code to Login 

6. Then you can Download Annual Tax Statement from Payment History

14 - Personal Service Income (PSI)

If you are selling your specific skills, knowledge and your Time for consideration, it means you are earning PSI.

Examples: 

PSI Includes

1. Income Earned from (Skills, Construction Work, Financial Professionals, Professional sportsperson, Entertainer, IT Consultants, Personal Efforts, Doctors etc.) as a sole trader or Under Contract 

PSI Does not Includes

1. Income was promptly paid to you by the entity as salary for Skills, Professionals.

PSI divided into Two Part

15 - Net income or loss from business

1. Income from sole trader business

2. Income from primary production business

3. Income under PAYG voluntary agreement

4. Income from the amount withheld for not quoting your Australian business number (ABN)

5. Income of independent contractor working under labour hire arrangement

6. Income received from Indigenous Student Success Programme

7. Income received from Translating and Interpreting Service National of the Department of Home Affairs

8. Income from promotional activity as an artist 

9. Income from any other business

16 - Deferred non-commercial business losses 

(Non-commercial Business means Other than Commercial Business) 

1. Losses from non-commercial business activities are to be carried forward and deducted against any future income from that non-commercial business activities only.

2. But to deduct Deferred non-commercial business losses from other assessable income (such as salary and wages etc) following condition need to satisfy.

1. Individual adjusted taxable income should be less than $250,000, and 

2. Has to pass any one of the Four commerciality tests or 

3. Commissioner allow to claim the loss.

3. This provision applies to individuals conducting a business either as sole trader or a partner.

4. This provision does not apply to hobbies and Passive investment income.

Four commerciality tests

1. Assessable Income Test

Assessable income from business activity, including capital gains and balancing adjustments, is More than or Equal to $20,000.

2. Profits test

Business activity resulted in profits, at least three years out of past five years, including the current year.

3. Real property test

1. Real property test includes real property or interest in real property used to carrying the business, has a total reduced cost base More than or Equal to $500,000

2. Real property test does not include dwelling and its adjacent land that is mainly used for private purposes

4. Other Asset Test

1. Other Asset Test Includes (Depreciating assets, Trading stock, Leased assets, and Intellectual property of the business) are valued More than or Equal to $100,000.

2. Other Asset Test does not include Land or Real property or Interest on Real property used to carry the business, cars, motorcycles or similar vehicles.

17 - Net farm management deposits or repayments

1. Farm management deposits helps to deal with inconsistent income from natural disasters, climate and market changes

2. Income deposited into a Farm Management Deposits (FMD) account is tax deductible in the financial year the deposit is made. It becomes taxable income in the financial year when it is withdrawn.

18 - Capital Gain

Refer Page No 16

19 - Foreign entities

Income and gains from foreign companies. Where Taxpayer or with associates, have 

1. Directly or Indirectly control 10% or more interest in foreign company or 

2. Had effective control of a foreign company 

20 - Foreign source income and foreign assets or property, including foreign source pension or annuity, foreign trust distribution.

21 – Rent

Refer Page No 15