We have an employee who is receiving salary continuance payments, and the insurer has also paid a one-off amount equivalent to 3 months' salary as an "enhanced bereavement benefit". Is this taxable and if so, is it a lump sum payment? Or would we apply marginal tax rates?
Depends on the terms of the policy, but generally any payments for replacement of income are taxable in the same way as the original income replaced.
Depends on the terms of the policy, but generally any payments for replacement of income are taxable in the same way as the original income replaced.
And the ATO STP2 Employer Guidance explicitly addresses how you report salary continuance payments from an insurer 😉 Deanne
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