Income on which you don’t pay tax

Non taxable amounts generally fall into three categories:

• exempt income
• non-assessable non-exempt income (“NANE”), and
• other non-taxable amounts which don’t affect your tax return

The Tax Office provides an annually updated page detailing types of income received by individuals which are not taxed.

They are listed below.

For individuals see:

• Amounts not included as income 2024
• Amounts not included as income 2023
• Amounts not included as income 2022
• Amounts not included as income 2021
• Amounts not included as income 2020
• Amounts not included as income 2019
• Amounts not included as income 2018

For businesses, see What to exclude from your business’s assessable income

Tax Treatment of Covid Relief Payments

Note that this list is not guaranteed to be complete. If your item is not listed, check with the Tax Office or a tax advisor.

Government Payment	Tax treatment
Robodebt class action settlements	Not taxable or required to report
JobKeeper	Assessable income, no GST
Pandemic Leave Disaster Payments	Assessable income **
Employment payments	Normal tax tax treatment (salary, leave, redundancy etc)
Cash Flow Boost	Exempt
Unit Trust distributes Cash Flow Boost	Not taxable but CGT event E4 (cost base attribution)
Company distributes Cash Flow Boost (dividend)	Taxable as a dividend
Pandemic leave disaster payment to individuals	Assessable income, no GST
(Covid-based) Early release of super	Tax free
Child Care Transition Payment (paid to providers)	Assessable income, GST free supply
Creative Economy Support – grant	Assessable income, no GST
Creative Economy Support – concessional loan	Not assessable. Interest/deductions accounted for in the normal way
Consumer Travel Support grant	Assessable income, no GST
Vic & NSW Government business support grants	Non assessable non-exempt income (NANE), no GST
State Govt Voucher Subsidies	Assessable income, and GST accountable

** Pandemic Leave Disaster Payments are assessable income but will NOT be included in the Centrelink payment summary, nor will it be prefilled in your income tax return. Tax return instructions are set out here.

See also at ato.gov.au: Government grants and payments during COVID-19

Redress Scheme Payments For NT & ACT Stolen Generations

Redress payments made to individuals under the Territories Stolen Generations Redress Scheme are exempt from tax and won’t affect eligibility for other Commonwealth payments and benefits. Legislation applies from 2021-22.

Disaster Relief Payments

Legislation has been passed to make disaster relief payments to individuals and businesses impacted by the devastating bushfires tax exempt.

This includes:

• Disaster Recovery Allowance payments made to individuals; and
• Payments to small businesses and primary producers that would otherwise have been taxable

Most one-time and emergency disaster relief payments are exempt, or may become so after specific government action to declare them as such.

Some exempt payments however may still need to be declared, although non-taxable.

Payments to volunteer firefighters, assistance provided by charities and employers are exempt from tax.

For more information, see Disaster assistance payments and your tax

National Redress Scheme for Institutional Child Sexual Abuse

Taxation Determination TD 2018/16 – payments are not assessable or subject to capital gains tax. The determination applies from 1 July 2018.

Stolen Generation Compensation

Stolen Generation lump sums payments made by the various states and territories are generally not taxable income and do not need to be disclosed in a tax return.

See:

• Payments made to members of the Stolen Generations in Victoria and also
• CR 2016/86 Income tax: assessable income: payments received under the South Australian Stolen Generations Reparations Scheme
• TR 95/35 Income tax: capital gains: treatment of compensation receipts

Defence Force Overseas Projects

ADF personnel deployed overseas don’t pay income tax on the salary and allowances if there is a certificate in force issued by the Chief of the Defence Force in writing to the effect that you are on eligible duty with a specified organisation in a specified area outside Australia (not as, or under, an attaché at an Australian embassy or legation).

See Australian Defence Forces overseas service

Temporary Residents

Temporary residents generally don’t pay tax on their non-Australian income except income from employment or services.

Foreign tax paid on such income can generally be claimed as a foreign income tax offset.

See Foreign income exemption for temporary residents.

 See also

• Low income tax offset
• Medicare levy income thresholds

Because of the complexity of rules determining taxability of income, and potentially high penalties for getting things wrong, qualified advice is always recommended. Some items may be partially taxable.

For Tax Office guidance call 132861 or alternatively seek advice from a registered tax agent.

This page was last modified 2024-06-15