Employment income, also known as earnings, is remuneration received by an employee. It is pay for work undertaken.
Examples of employment income are:
- allowances in excess of relevant expenses
- pay for piece work, for example, payment for an amount of fruit picked
- fixed and variable price contracts
- fringe benefits related to employment
- remuneration from your own private trusts, but not distributions
- remuneration from your own company, but not dividends
- regular drawings of income we recognise as being for work performed, even though they may be accounted for as non-remunerative lump sums, for example, directors’ fees
Employment income does not include:
- drawings by a principal from a sole trader business or partnership
- superannuation pensions
- personal injury compensation
- insurance payouts related to employment
- leave payments received as a lump sum on termination of employment
The employment income you and your partner earn may affect your rate of payment from us. This is because we calculate your payment rate by applying both an income test and an assets test. The test that results in the lowest rate of payment will apply.
There is no effect on the income test if your employment income, and other income, is less than the income free threshold. The threshold is different depending on whether you are single or have a partner and if you receive a pension or allowance. For every amount you earn above the threshold, your income support payment will reduce.
If you are age pension age and still employed, you may qualify for the Work Bonus. This reduces the effect of your employment income on your payment rate. Read more about the Work Bonus.