Lump Sum Payment (Invalidity, Tax Free Component)
Sep 17, 2024
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🎯 The reporting of payments for Lump Sum Payment (Invalidity, Tax Free Component) has not changed per the Australian Taxation Office Single Touch Payroll Phase 1 guidance. Lump Sum Payment (Invalidity, Tax Free Component) continues to be reported under ETP Type Code = R, O, S or P.
🎯 If you are unsure if this Pay Type applies to your circumstances, please refer to the Payee's Employment Contract or obtain advice from either the Australian Taxation Office or Fair Work Ombudsman.
Lump Sum Payment (Invalidity, Tax Free Component) is applicable when the Payee ceases employment due to Ill Health and receives a payment that relates to Invalidity per Table A: Withholding rates for ETPs.
Lump Sum Payment (Invalidity, Tax Free Component) uses the $ (or % of Rate Per Hour) set within the Pay Rate and Leave Entitlements are not applicable. Payments with this pay type may be considered either Taxable or Non-Taxable, however, they are not W1 (Total of Salary, Wages & other payments) or Ordinary Time Earnings (OTE).
