Last financial year, I received a gross relocation allowance of $22785.06AUD from my employer. My employer has already paid the taxable portion of this allowance, meaning I received the net amount of $11613.01AUD. As such, I should not need to pay income tax on this allowance.
I went to a tax professional, and he mentioned that this allowance had been incorrectly labelled as a $22785.06 "allowance", incorrect in the sense that this would be considered taxable income (when the taxable portion has already been paid, so I would be paying tax twice for it). He suggested that this allowance should instead be labelled as a "reportable fringe benefit". However, my employer's payroll staff insist upon the "allowance" label being correct.
I am looking for an authoritative ATO response that details how this case should be handled for income reporting purposes.
- Allowance? As my employer suggests.
- Reportable fringe benefit? As my tax advisor suggests.
- Something else?
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