Injured worker receives settlement at Work Cover WA on 2/7/2024. Settlement includes past and future wages, medicals, travelling. Is this settlement taxed / taxable?
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Hi @Cukai,
Some compensation payments may be taxed. The page I've linked gives examples of when an employer would need to withhold tax.
It can get a bit complex, but generally compensation that substitutes income (eg. wages) would be assessable.
On the other hand, a payment to compensate for personal injury may be considered capital.
I'd recommend a private ruling if you want to be sure if any portion of the compensation is assessable or not.
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