This question is about employment termination payments (ETPs), which you received as a result of the termination of your employment.
These payments are shown on an income statement or a PAYG payment summary – employment termination payment (NAT 70868).
If you have been stood-down or have lost your job as a result of COVID-19, you may have received an ETP. See Tax on employment payments for more information on payments you may receive in these circumstances.
This item also includes:
- death benefit ETPs; these are certain payments made as a consequence of the cessation of a person's employment that you received due to that person's death
- foreign ETPs; these are certain ETPs received from overseas employment which were exempt from income tax under that country's law
- late termination payments; these are certain ETPs you received more than 12 months after you retired or ceased employment.
Do not show the following payments anywhere on your tax return:
- foreign termination payments; these are certain termination payments that were not exempt from income tax of the foreign country
- ETPs you received as the trustee of a deceased estate (ETP code T); these payments must be shown on the trust tax return of the deceased estate
- departing Australia superannuation payments.
See also:
- Taxation of termination payments
- Employment termination payments
- Tax on employment payments
- Special circumstances and glossary 2021
Did you receive an ETP?
No |
Go to question 5 Australian Government allowances and payments 2021, or return to main menu Individual tax return instructions 2021. |
Yes |
Read on. |
Answering this question
You will need your income statement or PAYG payment summary – employment termination payment.
If you do not have all your payment summaries, contact your employer or payer. If you are unsuccessful in obtaining any of these, there is information in Income statement not finalised or missing payment summary. If you can't access your income statement through myGov, contact us on 13 28 61.
If you have received a foreign ETP, your foreign employer may not have issued you with a PAYG payment summary – employment termination payment.
See also:
Completing your tax return
If you received two or more ETPs, go to step 5. Otherwise, read on.
Step 1
Write in the left column at item 4 the date of payment and your payer's Australian business number (ABN), as shown on your income statement or PAYG payment summary – employment termination payment.
Step 2
Write the total amount of tax withheld from your ETP, as shown on your income statement or PAYG payment summary – employment termination payment, under Tax withheld at the left of I item 4.
Step 3
Write the taxable component of your ETP, as shown on your income statement or PAYG payment summary – employment termination payment, at I item 4.
Step 4
Write the ETP code, as shown on your income statement or PAYG payment summary – employment termination payment, in the CODE box at the right of I on your tax return.
You must enter a valid code. You should contact the employer or payer if your income statement or PAYG payment summary – employment termination payment does not have an ETP code. If you are unable to contact the employer or payer, read through all the codes below and select the one that best describes your payment.
ETP Code |
Description |
|---|---|
R |
if you received your ETP because of:
|
O |
if your ETP is not described by R, for example, you received it because of:
|
S |
if you received a code R ETP in 2020–21 and you had received another ETP (code R or code O), or a transitional termination payment, in an earlier income year for the same termination of employment |
P |
if you received a code O ETP in 2020–21 and you had received another ETP (code R or code O), or a transitional termination payment, in an earlier income year for the same termination of employment |
D |
if you received a death benefit ETP and you were a death benefits dependant |
B |
if you received a death benefit ETP in 2020–21 and you were not a death benefits dependant and you had received another death benefit ETP in an earlier income year for the same termination of employment |
N |
if you received a death benefit ETP and you were not a death benefits dependant, and code B does not apply |
You have now finished this question. Go to Where to go next.
Step 5
As you received two or more ETPs, you need to complete an Employment termination payment schedule using the information shown on your income statements or payment summaries.
Step 6
When you have completed the schedule, add together all the amounts of tax withheld, add together all the taxable component amounts and transfer the two totals to item 4 on your tax return. Write the total tax withheld under Tax withheld at the left of I, write the total taxable component at I, and print the code letter M in the Code box.
Do not write any date of payment or payer's ABN on your tax return.
Step 7
Attach your schedule to page 3 of your tax return and print X in the Yes box at Taxpayer's declaration question 2 on page 10.
Where to go next
- Go to question 5 Australian Government allowances and payments 2021.
- Return to main menu Individual tax return instructions 2021.
- Go back to question 3 Employer lump sum payments 2021.