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Lump Sum Payments – Employer Reporting

What should employers report on an employee’s statement of earnings (which most people still call a group certificate)? Do not include any amount shown at a lump sum payment field in Gross payments. You must show each lump sum payment as the appropriate payment type.

There are four types of lump sum payments:-

  1. Amounts paid for leave entitlements not shown.
  2. Amounts paid for unused long service leave that accrued before 16 August 1978.
  3. The tax-free component of a genuine redundancy payment or an early retirement scheme payment.
  4. Amounts paid for back payment of salary or wages that accrued more than 12 months ago or any return to work payments.

The employer must include all PAYG amounts withheld from lump sum payments in the total tax withheld.

The Australian Taxation guide “How to Complete the PAYG Payment Summary” Individual Non-Business form is useful or call your tax adviser.

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