Income Type classifies the employee based on the type of payment regularly made to them.
Salary and Wages (SAW)
Definition - Assessable income paid to payees for work performed in Australia, other than that included as other Income Types.
Payees – employees, company directors, office holders, religious practitioners, and death beneficiaries.
Note: Death Beneficiary – Payers should not withhold, or report through STP, amounts from the deceased employees’ unpaid salary or wages or unused leave, paid to a death beneficiary. This applies to income that was earned prior to death but paid after the death of the employee
Closely Held Payee (CHP)
Definition - Employers who employ Closely Held Payees may use this Income Type if they meet the criteria. For further information, please refer to the ATO.
A payee who is directly related to the entity from which they receive payments, such as family members of a family business, directors or shareholders of a company, or beneficiaries of a trust.
Inbound Assignees to Australia (IAA)
Definition – Some multinational payers exchange, or transfer, employees between affiliated entities in different tax jurisdictions. This is done for business and commercial purposes.
Payees – payee is employed by an offshore entity; is seconded to work in Australia; has all or part of their base salary and other remuneration paid by an offshore entity; is maintained in Australia using a “shadow payroll” (notional) arrangement for the purposes of calculating PAYGW and superannuation obligations and applying internal tax equalisation and protection policies.
Working Holiday Makers (WHM)
Definition – income only for limited visa subclasses for foreign residents.
Payees – In Australia, on Visa subclass 417 (Working Holiday) and 462 (Work and Holiday) only.
Seasonal Worker Programme (SWP)
Definition – Regional programmes for government-approved employers
Seasonal Worker Programme (SWP) – administered by the Department of Employment, Skills, Small and Family Business.
Note: Pacific Labour Scheme (PLS) – administered by the Department of Foreign Affairs and Trade – is reported under SAW.
Foreign Employment (FEI)
Definition – Assessable income paid to payees, who are Australian tax residents, that is subject to tax in another country, for work performed in that country, if the qualification period is met. The payer must pay (or be liable to pay) the foreign government for the tax to qualify as foreign employment income. On finalisation, the Income Type must include an amount for foreign tax paid. If no foreign tax is paid (or payable) by the end of the financial year, then the income should be reported as Salary and Wages.
Payees – Australian tax residents, employed/engaged by an Australian entity, performing work in another country for a duration that meets or exceeds that country’s qualification period.
Voluntary Agreement (VOL)
Definition – a written agreement between a payer and a contractor payee to bring work payments into the PAYGW system. The payer does not have to withhold amounts for payments they make to contractors. However, the payer and a contract worker (payee) can enter into a voluntary agreement to withhold an amount of tax from each payment they make to the contractor.
Payees – a contractor that must have an ABN and is an individual person.
Labour Hire (LAB)
Definition – payments by a business that arranges for persons to perform work or services, or performances, directly for clients of the entity.
Payees – contractors only, not employees.
Note: Refer to the ATO for more information on Labour Hire.
Other Specified Payments (OSP)
Definition – For the purposes of subsection 12-60(2) in Schedule 1 to the Act, payments of the following kinds are prescribed:
payments for tutorial services that are provided to improve the education of Indigenous people and are financially supported (directly or indirectly) by the Commonwealth;
payments for translation and interpretation services provided for the Translating and Interpreting Service (also known as TIS), conducted by the Department, administered by the Minister administering the Migration Act 1958;
payments under a contract to an individual engaged as a performing artist to perform in an activity in which the individual:
endorses or promotes goods or services; or
appears or participates in an advertisement; unless the individual is engaged primarily because he or she is a sportsperson.
payments of green army allowance (within the meaning of the Social Security Act 1991).
Payees – individuals who perform work or services and are of a kind prescribed by the regulations. Payees with this income type are required to be reported with a TFN.