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Asmod1(Initiate)Initiate
20 Sept 2025

Hi folks


I got a TPD lump sum payout while still receiving work cover. My private insurance took out a total of 36k tax on the taxable component of this lump sum (150k) and paid me the remaining funds.

For the tax return next year, do I need to add up the following to work out the tax as assessable income:

Work Cover (~3k a month) + taxable component of the lump sum (150k)

If the above is true, I will need to pay back a lot of money during the tax return even though the tax is paid on the TPD lump sum already.

Thank you.

335 views
3 replies
335 views
3 replies

All replies

NikkiATO(Community Moderator)Community Moderator
23 Sept 2025

Hi @Asmod1,


Yes, both your workers compensation payments and the taxable component of your TPD lump sum will need to be included as assessable income on your tax return.


When you lodge your tax return, you'll need to report:

  • Your workers compensation payments
  • The taxable component of your TPD lump sum.


The $36,000 tax withheld from your TPD payment will be counted as tax already paid when your overall tax liability is calculated. Whether you'll need to pay additional tax depends on your total income for the year. We have an online Income tax calculator that will help you work out your refund of debt estimate.

Asmod1(Initiate)Initiate
15 Oct 2025

Hi NikkiATO

Thanks for your response. Just a few questions:

  1. Am I supposed to put my gross income for the year (Work Cover payments) + 150k (taxable lump sum component) in the Total Gross Income Payments in the calculator?
  2. Total Tax paid from work cover + 36k tax paid on the Taxable lump sum component goes in total amount of tax on the form?
  3. Do I need to deduct $18,200 tax free threshold from the "Tax you have to pay" determined by the calculator?


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how to calculate tax return after TPD lump sum payout? | ATO Community