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Adjusted taxable income may include different types of income:
- taxable income
- foreign income
- tax-exempt foreign income
- total net investment losses
- reportable fringe benefits
- reportable superannuation contributions
- certain tax free pensions or benefits.
It may also include a deemed amount from account based income streams.
If you have a partner, their income can also affect your adjusted taxable income.
Taxable income is your gross income minus allowable deductions. It’s the income you have to pay tax on. It includes income from any of these:
- wages and salaries
- a business
- any taxable payments you get from us
- any taxable payments you get from the Department of Veterans’ Affairs (DVA)
- taxable COVID-19 payments you got, including Pandemic Leave Disaster Payment and High-Risk Settings Pandemic Payment
- capital gains, such as profit from the sale of shares or property.
Income under the tax free threshold counts as taxable income.
Taxable lump sum payments also count in your taxable income. These may include any of these:
- taxable superannuation death benefits
- taxable compensation payments
- taxable insurance payouts
- superannuation released early.
We won’t count superannuation withdrawals made under the First Home Super Saver Scheme as taxable income.
If you make a loss for the year, your taxable income will be nil. It’s nil when your allowable deductions are more than your gross income. You can find out more about gross income and allowable deductions on the Australian Taxation Office (ATO) website.
You might get some payments from us that aren’t taxable. This means they’re not included as taxable income. Some examples are:
You should check with the Australian Taxation Office if you are unsure about what income is included as taxable income.
Foreign income is money you get from outside Australia and don’t pay Australian income tax on. It can include money from foreign business interests, investments or income you earned overseas.
Read more about foreign income for family assistance.
Tax-exempt foreign income
Tax-exempt foreign income applies to family assistance payments. It’s income from Australia, earned by either:
- members of the armed forces serving overseas
- Australians on overseas projects approved by the Minister for Trade, Tourism and Investment.
Target foreign income
- foreign income you get from outside Australia that you don’t pay Australian income tax on
- tax-exempt foreign income from foreign service on an approved project for a continuous period of 91 days or more.
Total net investment losses
Total net investment losses are any of these:
- when your investment expenses are more than the income you get from your investment
- negatively geared investments from rental property or financial investment.
We add both together to come up with your total net investment losses.
A net loss from rental property income
If your mortgage repayments are more than the rental income you get.
A net loss from financial investment
If your costs to purchase an investment are more than the income you get from the investment.
Reportable fringe benefits are pre-tax benefits you get from your employer. They can include payment of any of these:
- your rent or home loan
- a mobile phone
- a car, including zero or low emissions vehicles
- school fees for children
- health insurance premiums
- child care expenses.
You need to tell us the gross amount of reportable fringe benefits you get from your employer. If your employer is a not-for-profit organisation that is exempt from fringe benefits tax, you should include this as exempt reportable fringe benefits. If your employer is different you’ll need to include the gross amount as other reportable fringe benefits.
Your reportable fringe benefits are on your payment summary at the end of the financial year. You can ask your employer to tell you the expected gross amount for this financial year. If you're not sure if your employer is a not-for-profit organisation, check with your payroll area.
Reportable superannuation contributions
A reportable superannuation contribution is a personal contribution you make or is made on your behalf to a super fund. You will claim it as an income tax deduction when you lodge your tax return. This is on top of the compulsory payments from your employer. You can find more information about personal deductible contributions on the ATO website.
Tax free pensions or benefits
This applies to family assistance payments and Carer Allowance.
You might get tax free pensions or benefits from us or the DVA.
These can include non-taxable Centrelink payments such as:
- Disability Support Pension
- Carer Payment when you and the person you care for aren’t old enough to get Age Pension.
They can also include non-taxable DVA payments such as any of these:
- Invalidity Service Pension
- War Widow’s and War Widower’s Pension
- Partner Service Pension
- Income Support Supplement
- Defence Force Income Supplement Allowance (DFISA) where it’s exempt from income tax
- those under the Military Rehabilitation and Compensation Act, including arrears and lump sums from Wholly Dependent Partner payments.
They don’t include any of these payments:
- Carer Allowance
- Carer Supplement
- Family Tax Benefit
- Pharmaceutical Allowance
- Rent Assistance
- Additional Child Care Subsidy
- Bereavement Payments
- Child Care Subsidy
- COVID-19 Disaster Payment
- Pensioner Education Supplement
- Remote Area Allowance.
Read more about tax free pensions or benefits included in your adjusted taxable income. The information is on the Department of Social Services website in the:
State government payments
You may get a payment from a state government. If you do, you may need to include it in your adjustable taxable income. If you’re unsure if you need to, contact the agency that paid you.
Account-based income stream benefits
We use deeming rules to work out income from your financial assets. Deeming applies to account-based income streams if you or your partner are 60 years of age or older.
Read more information about deeming and how we calculate it.
Child support you pay
If you pay child support, deduct it from your adjusted taxable income for any of these:
This includes all of these:
- child support we collect
- private maintenance you pay directly to the other parent
- non cash maintenance benefits that the child gets, such as school fees, clothes, etc.
It doesn’t include spousal maintenance that you pay to a previous partner. Find out more about spousal maintenance on the Family Court of Australia website.